Non-tariff barriers such as administrative customs procedures and divergence in product standards are reducing opportunities to trade between the EU and Mercosur countries (Argentina, Brazil, Paraguay, Uruguay and Venezuela). A study by LEI Wageningen UR shows that the Dutch agrifood sector are interested to export to Mercosur but onerous and time consuming procedures to get export approval hinder efforts to seize these opportunities.
EU-Mercosur trade negotiations advance with difficulty., Exports from the EU to Mercosur consist largely of industrial goods whereas EU imports from Mercosur are dominated by agricultural products, which means that interests in negotiations to liberalise bilateral trade are asymmetric.. Agricultural trade relations of the EU and the Netherlands with Mercosur countries are extremely lopsided, with imports far exceeding the value of exports to Mercosur, indicating Mercosur has a comparative advantage in agriculture and food products.
Reducing trade costs related to, for instance, border or conformity assessment procedures or on divergence in product standards would, however, enable EU exporters of agricultural products to enter Mercosur markets more easily. This would be very important for the Dutch horticulture and dairy sector. A trade agreement that would smooth the procedure to complete a Pest Risk Analysis (PRA) to get export approval would increase export opportunities of the Dutch fruit and vegetable sector importantly. In addition, the EU/Dutch dairy industry would benefit much from a dispatch of labelling requirements and food safety inspections at the export company’s premises. In case of market liberalisation, the Dutch meat industry would face increased competition from Mercosur suppliers at the EU market. This will be even more so if the meat industry in Mercosur countries is able to further enhance its capacity to comply with EU’s food safety standards.