Europe has its eyes on increasing access for its companies making industrial products, notably cars for which tariffs are 35%. It also wants to allow its firms to compete for public tenders, and to sell more wine and cheese. Mercosur aims to increase exports of farm products.
Brazil said the agreement would eliminate import tariffs for several farm products, including orange juice, instant coffee and fruit. It will also get a new 99,000 tonne quota of beef at a 7.5 percent tariff, phased in over five years, along with tariff-free 180,000 tonne quotas each of sugar and of poultry.
Brazil’s President Jair Bolsonaro said on Twitter that the deal was historic and one of the most important trade agreements of all time.
Past deadlines had come and gone, because of EU nerves about a surge of beef imports and Mercosur hesitation about opening up some industrial sectors, such as cars.
The agreement still faces challenges before it can enter force. EU countries and the European Parliament both need to give their backing.
France and some other EU countries fear the impact of a sharp rise in beef imports, while environmental groups, whose influence is stronger in the new European Parliament, argue that the agreement could exacerbate deforestation.