Agreement between Mercosur and EU could open US$ 100 billion in market opportunities, shows Apex study

The possible agreement between Mercosur and the European Union could open a “window of opportunity” of US$ 100 billion (about R$ 522 billion) in exports from Mercosur to the European bloc.

A study by the Brazilian Trade and Investment Promotion Agency (ApexBrasil) crossed data on products imported by the European Union that are also produced and exported by Mercosur countries.

According to the document, “by crossing ApexBrasil’s Map of Global Opportunities with the lists of products with immediate tariff reduction (exemption) or within 4 years of the agreement, imports from the European Union identified as opportunities reach 100 billion dollars”, point.

Still according to the study, Brazilian exports of these products currently face tariffs of 4.5%, on average. With the elimination of these tariffs, Brazil’s competitiveness in relation to other trade partners in the bloc should increase.

Of the US$ 100 billion that can be “co-opted” by Mercosur, only US$ 3.5 billion would come from Brazil. According to Apex’s Market Intelligence Manager, Igor Celeste, the analysis was carried out taking into account approximately 242 products if their tariffs were zeroed in a period of up to four years.

Also according to Celeste, in recent years, imports of industrialized products have dropped by the EU. “There was an increase in the primary tariff, and the agreement may reverse this trend. We want to continue selling products in all categories, we can increase the dynamism of our industrialized products. The primarization of the agenda is a concern, but we have to expand the sale of all products, even more of the industrialized ones”, highlights Igor Celeste.

Among the sectors and products that may benefit the most, the Apex identified the sectors of machinery and equipment, chemical products and other manufactured goods.

“For machinery manufacturers, for example, the implementation of the agreement may bring new prospects for expansion, given that, in 2022, there was a 5.9% drop in their net revenue, according to data from the Brazilian Association of Machines and Equipment (Abimaq )”, they point out.

Still according to the study, machines and equipment with identified opportunities have, in the European Union, an import market of US$ 60 billion a year, of which Brazil contributed with around US$ 1.5 billion. Tariffs between Brazil and the bloc vary between 1.7% and 4%, to be eliminated immediately or in four years.

Another sector that can be positively affected is meat and meat preparation. According to the Apex, annual imports from the European Union, with opportunities for Brazil, add up to US$ 373 million annually.

While annual exports from Brazil to the bloc totaled US$ 93 million per year. Tariffs for the sector vary between 6.4% and 16.6%. The main markets for Brazil are countries such as Italy, Belgium and Germany.