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Brazil: EU to Eliminate Surtax to Mercosur Products

The trade negotiations now underway between Mercosur and the European Union, which are scheduled to end on October 31 with an agreement, will benefit the agribusiness sector in Brazil’s Northeast region, says Antonio Donizeti of the National Agriculture Confederation (CNA).

Donizeti explains that shrimp, tropical fruit, cigars and sugarcane-based ethanol should obtain expanded import quotas and lower surtaxes.


He points out that with regard to shrimp (96% of Brazilian production is in the Northeast) the tendency is to eliminate the surtax, now at 4.2%. EU imports of shellfish are worth some US$ 2 billion annually, but Brazil sells only US$52 million.

Last year, reports Donizeti, the Northeast region exported mainly sugar, shrimp, fruits, cacau, leather goods, soybeans and cashew nuts.


The problem is that many of those goods face sanitary barriers on the international market, especially in the US.


So, says Donizeti, the solution is to make the necessary investments in the sector to raise sanitary standards and continue on track to maintain Brazil’s position as a strong exporter.


Tariff Reduction


In August, the president of the Brazilian Association of Meat Export Industries (Abiec), Pratini de Moraes, had said that Brazilian beef exports anticipate higher earnings, if negotiations with the European Union over tariffs on products sold to the economic bloc are successful.

The countries of the Southern Common Market (Mercosur) are negotiating with the European Union to reduce tariffs on meat. Brazil would be the biggest winner.


Of the Mercosur’s total meat shipments to the European Union, Brazil’s share amounts to 42.5%, while Argentina, Paraguay, and Uruguay account for 29.5%, 7%, and 21%, respectively.


According to the Abiec’s monthly balance, Brazil has already been receiving higher prices for its merchandise sold abroad.

Between January and July of this year, the country’s revenues from meat exports were US$ 1.3 billion, 71.49% more than in the first seven months of 2003. Sales of fresh and processed meat exceeded one million tons.


The biggest gain occurred in sales of fresh meat. The 708,356 tons that were shipped abroad yielded revenues of US$ 1.05 billion. During the same period last year, 506,300 tons were sold, earning US$ 571.6 million.

When only sales of processed beef from January to July are considered, 300,920 tons were shipped, and revenues amounted to US$ 262.3 million, corresponding to increases of 35.16% in earnings and 17.94% in quantity.


According to Pratini de Moraes, this level of activity maintains Brazil’s world leadership in the export of carcasses (cuts with bones).

Pratini de Moraes revealed that the reason profits and progress haven’t been even greater in the sector is the tariff policy practiced by the European bloc.


According to him, there has been a substantial recovery, around 35%, in dollar prices since the end of last year. In the second semester the tendency will be for prices to remain stable or rise slightly and for sales volume to grow.


Pratini de Moraes expects the country to maintain its leadership position, with the continuation of the sanitary inspection program and investments in the areas of logistics, transportation, and marketing. The US$ 2 billion target announced at the beginning of the year should be surpassed, in his assessment.

The biggest importers of fresh meat from Brazil this year were Holland, Belgium, Luxembourg, Russia, and Chile. Algeria, which entered the list in July, appears among the new markets. There was also a significant increase in Iran’s participation.

Agência Brasil

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