A new free trade deal between Europe and South American countries could impact the agriculture sector and olive oil trade, Olive Oil Times wrote.
The landmark trade agreement was signed in Montevideo, Uruguay, by delegates from the European Commission (EC) and four Mercosur countries: Brazil, Argentina, Uruguay and Paraguay, the 16 December report said.
Although the Mercosur-European Union (EU) free trade deal still required the approval of individual countries and Europe and its parliament before coming into force, it would set up the largest free trade area in the world covering all significant economic sectors, including agriculture and olive oil, Olive Oil Times wrote.
Negotiations on the agreement started in 1999.
According to the EC, removing tariffs will create a range of new opportunities.
With EU exports of goods and services to Mercosur totalling more than €80bn (US$82.5bn)/year and European countries accounting for more than €384bn (US$395.7bn) in investments within Mercosur economies, the region is the bloc’s tenth largest trading partner, according to the report.
The EC said the agreement was strategic, aiming to challenge China’s position as Mercosur’s primary trading partner.
EU olive oil exports to Mercosur currently face a 10% tariff, while Argentina applies a tariff of 31.5%.
As the deal would remove these tariffs, this could boost the competitiveness of EU olive oil in Mercosur markets, the report said.
However, olive oil producers across the Mercosur had raised concerns that cheaper European olive oils would impact the market share of domestic producers, Olive Oil Times wrote.
In 2023, EU olive oil exports to Mercosur totalled more than €493M (US$508M).
Brazil is one of the world’s largest olive oil importers, averaging approximately 90,000 tonnes/year over the past three seasons, according to International Olive Council (IOC) data.
