Agricultural quotas. Increasing the pressure on humans and nature The proposed agreement will increase the trans- atlantic flow of goods by reducing tariffs and expanding duty-privileged import quotas. The agricultural quotas agreed between the EU and Mercosur in summer 2019 are at the centre of the public debate.19 According to this agreement, the EU will grant Mer- cosur additional preferential tariff quotas for meat, sugar, rice and bioethanol. An overview shows that the beef20 and chicken quotas could increase by a half compared with the existing Mercosur exports, while bioethanol quotas could increase by a factor of more than six (see Diagram 6). Conversely, EU exporters can also benefit from Foto: Marizilda Cruppe EVE / Greenpeace duty-free quotas for cheese, milk powder and baby food under the agreement. These actually Cattle farms are driving deforestation. How do the quotas affect Mercosur exports? G auging the impact of the new import quo- tas on the production of the preferential agricultural goods and their transatlantic trade is subject to a number of uncertainties. Some of Mercosur’s exports are already sub- ject to tariff-rate quotas that have not always been fully utilised in the past, e.g. the quota for high-quality beef (the so-called Hilton quota).21 Even after the introduction of the newly offered quotas, it cannot be ruled out that such under-utilisation will occur from time to time in certain years. Exporters might also increasingly switch to the new quotas, meaning that the ones that are already in place will remain underutilised more often. However, it is also possible that an ex- pansion could take place, in which not only the quotas are exhausted, but an increasing number of exports also take place at higher tariff rates beyond those quotas. Today, for example, the Mercosur countries already im- port almost half their beef at the higher tariff rates beyond the existing quotas.22 In other words, beef from Mercosur is so competitive that it can also be sold in the EU at higher tariff rates. A scenario of this kind – in which the “in-quota” volumes are used up and “out-of- quota” volumes increase – is favoured by the high tariff savings offered by the agreement. The Brussels think tank Bruegel estimates that the new beef quotas alone will save ex- porters around 430 million euros in customs payments. Taking all the new quotas togeth- er, the savings could amount to almost 920 million euros.23 These additional profits will increase the profit margins for ...
Agricultural quotas. Increasing the pressure on humans and nature The proposed agreement will increase the trans- atlantic flow of goods by reducing tariffs and expanding duty-privileged import quotas. The agricultural quotas agreed between the EU and Mercosur in summer 2019 are at the centre of the public debate.19 According to this agreement, the EU will grant Mer- cosur additional preferential tariff quotas for meat, sugar, rice and bioethanol. An overview shows that the beef20 and chicken quotas could increase by a half compared with the existing Mercosur exports, while bioethanol quotas could increase by a factor of more than six (see Diagram 6). Conversely, EU exporters can also benefit from Foto: Marizilda Cruppe EVE / Greenpeace duty-free quotas for cheese, milk powder and baby food under the agreement. These actually Cattle farms are driving deforestation.
