EU negotiators present farm trade offers to Mercosur

BRASILIA (Reuters) - European negotiators presented their farm trade offer to South America’s Mercosur bloc on Tuesday as part of talks for a trade pact they hope to complete by the end of this year, officials from both sides said on Tuesday.

Brazilian negotiator Ronaldo Costa Filho said in a forum with business leaders that the European offers for beef and ethanol imports have been made, clearing the way for negotiations on two key products that had been stumbling blocks. He declined to give details of quota sizes because the offers were just made and are still subject to negotiation.

The European Commission, which negotiates on behalf of the 28 EU nations, had proposed including beef and ethanol in an offer to Mercosur in 2016, including a tariff-free 78,000-tonne annual allotment of beef.

However, both were removed because they were deemed too sensitive for beef-producing EU countries such as France and Ireland.

The current EU offer included poultry and other farm products. Sugar, another product that has European producers worried over facing cheaper competition, was not on the table.

The Mercosur countries of Argentina, Brazil, Paraguay and Uruguay had previously said an offer without beef in particular could not lead to a deal.

Last week, 11 EU nations led by France and Ireland proposed postponing the farm trade offer to Mercosur until rules can be agreed to avoid unfair competition.

Brazilian officials expected the EU offer to include an annual import quota of up to 70,000 tonnes of beef and 600,000 tonnes of ethanol, which they said was disappointing because it was less that the EU put on the table in 2004, when the quotas were 100,000 tonnes of beef and 1 million tonnes of ethanol.

Brazil’s FPA congressional agriculture caucus, which groups more than 200 lawmakers aligned with agribusiness, expressed concern over the lower ethanol and beef quotas and higher tariffs than had been hoped for.

President Luis Miguel Etchevehere of Argentina’s powerful farm lobby, the Sociedad Rural, who was in Brasilia for the business forum, said the numbers, if true, were paltry.

“Europe consumes 8 million tonnes of beef a year,” he said. “That offer for the four Mercosur countries is like two hamburgers for each EU inhabitant per year.”

A European diplomat said less beef was being consumed nowadays in Europe and that, after a difficult unveiling of the offers, negotiations with Mercosur were “off to a good start”.

Additional reporting by Lisandra Paraguassú in Brasilia and Maximiliano Rizzi in Buenos Aires; Editing by Jonathan Oatis and James Dalgleish