Meats, cereals, flours and preparations, fruits and soy complex are products with greater potential, according to a study by the organization
The signing of the free trade agreement between Mercosur and Canada has the potential to increase revenues of Brazilian exports of agricultural products by US $ 7.8 billion, according to a study by the Confederation of Agriculture and Livestock of Brazil (CNA).
The study will be officially launched next Wednesday, 29, in a webinar on the progress of the negotiations, with the participation of the Ministry of Agriculture, Livestock and Supply (MAPA) and the Ministry of Foreign Affairs (MRE).
According to the CNA, the results of the document show the relevance of the agreement for the sector and will subsidize Brazilian negotiators with technical data, to help in decision-making and in defining the country’s positioning.
Meats, cereals, flours and preparations, fruits and the soy complex are the sectors of the agribusiness, according to the CNA, which have the most potential to benefit from the agreement. In the case of meat, the increase in revenue may reach US $ 1.4 billion per year.
“Noble and better quality cuts tend to have better competitiveness in the Canadian market. Animals raised on pasture, lower fat percentage and environmental sustainability attract the attention of the average consumer, ”says the study.
The segment of cereals, flours and preparations may increase US $ 771.9 million in sales to Canada. Corn is the product with the greatest capacity to increase revenue (US $ 324.0 million), while rice, which already has an import tax zeroed in the North American country, would still have exploitable potential in the short term, says the CNA.
For the fruit sector, the trade opportunity would be US $ 751.7 million. According to the document, despite the already zeroed rates, Brazil is still not very significant in supplying the Canadian market for tropical fruits, such as melons (1.7% of the market), guavas and mangoes (8.1%), lemons and files (1.4%).
In the soybean (grain and bran) complex, CNA estimates an increase of US $ 703.9 million, despite competition with the United States. “The geographical proximity between the two North American countries implies lower logistics and transportation costs”, indicates the study.
With regard to tariffs, the understanding of the entity’s study is that the Canadian market tends to negotiate the elimination of a good part of them in the year following the entry into force of the agreements, which may benefit Brazilian producers in the short term.
“On average, about 89% of the sector’s tariff lines were eliminated in the first year of the agreements analyzed with Canada. The reduction in average tariffs in percentage points can reach up to 8.11 percentage points (pp) in the case of cereals. For vegetables and meat, the reduction reaches 5.88 p.p. and 5.35 p.p., respectively ”.
The study shows that, in general, tariffs are not high for Mercosur countries. Many products from Brazilian agribusiness already enter this market free of the import tariff. However, the Confederation of Agriculture and Livestock warns negotiators of the importance of improving access conditions and non-tariff measures.
The analysis of the CNA concludes that, in addition to generating positive impacts on Brazilian exports, the Mercosur-Canada agreement can expand the commercial borders of the South American bloc with markets that import food, beverages and agricultural goods.
In 2019, trade in agricultural products with Canada recorded a turnover of US $ 628.7 million. Brazilian exports of fresh chicken meat, cashew nuts and corn increased by US $ 21.3 million, according to data from the Ministry of Economy.
Source: Canal Rural