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The Mercosur-EU agreement enters provisional implementation from May 1st, with an initial focus on the Commercial Pillar, immediate tariff reduction, and different effects for instant coffee and fruits, sectors that will have opportunities in the European market but also regulatory, sanitary, logistical, and environmental demands.
The Mercosur-EU agreement enters its provisional implementation phase starting this Friday, May 1st, after more than two decades of negotiation, bringing Brazilian agribusiness closer to the European market. The first stage will focus exclusively on the Commercial Pillar, with immediate tariff reduction without awaiting individual approval from the 27 European parliaments.
Mercosur-EU Agreement opens market, but requires adaptation
The instrument coming into force is the Interim Trade Agreement, aimed at applying the commercial part. The measure opens a new tariff window but does not guarantee automatic sales for Brazilian producers and exporters.
Tariff reduction expands access, but compliance with requirements will be decisive in transforming opportunity into effective business. The EUDR, the European Union regulation for deforestation-free products, appears as one of the main points of attention, especially for coffee.
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For Daniel Vargas, a professor at Fundação Getulio Vargas, the challenge lies in the practical proof of sustainability. In the case of the coffee sector, this could be the major pressure point in the next 18 months.
Instant coffee will have gradual tariff reduction
For instant coffee, the Mercosur-EU agreement foresees a tariff reduction schedule over four years. The current tariff on the product is 9%, and the first period will already have an initial reduction of 1.8 percentage points.
Aguinaldo José de Lima, executive director of the Brazilian Association of the Instant Coffee Industry, believes that the move tends to help Brazil regain market share in Europe. He states that 15 or 16 years ago, the country sold 30% more to the European Union than it currently does.
Today, the European bloc accounts for about 20% to 22% of the sector’s exports, with a volume close to 16,000 tons annually. Even in a provisional phase, the entity’s assessment is of a positive impact, with associated companies already guided and negotiating with European clients interested in the new tariff scenario.
The expectation is for gradual growth in exports as the tariff is reduced. Progress, however, will depend on the companies’ ability to meet the demands of the European market and organize information required by buyers.
Fruits can capture gains more quickly
In the fruit sector, the effects of the Mercosur-EU agreement tend to be more immediate, although they vary by product. Some categories, such as table grapes, will have zero tariffs upon the agreement’s entry into force, while others will follow reduction schedules of four, seven, or even ten years.
Waldyr Promicia, president of the Brazilian Association of Fruit Producers and Exporters, classifies the scenario as mixed but positive. The assessment is that there are products with immediate zero tariffs and others subject to stages of reduction.
There is still no consolidated estimate of the numerical impacts for the sector. The indicated trend is an increase in competitiveness and the opening of new opportunities in the European market.
Competitiveness will depend on conformity
As with coffee, the fruit sector has already begun an adaptation process. Abrafrutas guides exporters on adjustments to documentation and requirements demanded by European buyers.
The sector’s understanding is that the agreement represents a strategic advance in trade relations and can boost exports in the medium and long term. For fruits, less regulatory pressure may allow for faster capture of benefits, provided sanitary and logistical challenges are overcome.
Vargas believes that the consolidation of Brazilian competitiveness will depend on internal adjustments, data organization, and adaptation to the bloc’s requirements. The environmental part of the broader agreement remains suspended, while tariff reduction advances in the short term within the Mercosur-EU agreement.
With information from Canal Rural
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