Opportunities and Challenges in Some Sectors of Bulgarian Agriculture within Mercosur Free Trade Agreement (Beef and Poultry Sectors)
Dilyana Mitova
Abstract: The purpose of this article is to analyze the opportunities and challenges facing some sectors of Bulgarian
agriculture in the context of a comprehensive free trade agreement between the Member States of the European
Union and Mercosur (a bloc comprising Argentina, Brazil, Paraguay and Uruguay).
The new framework for trade – part of a broader association agreement between the two regions – is expected
to consolidate their strategic political and economic partnership and create significant opportunities for
sustainable growth for both countries while protecting the environment and safeguarding interests EU consumers
and sensitive economic sectors.
Studies of the effects of this agreement work with a number of assumptions, since in principle the parties
will proceed to a legal revision to come up with the final version of the Association Agreement and all its
commercial aspects. The Commission will then translate the text into all official EU languages and submit the
agreement of approval to the Council and the European Parliament.
In the field of agriculture, the EU–Mercosur agreement will affect a major abolition and / or phasing in of
customs duties, sanitary and phytosanitary measures, etc. The customs duties of 93% of tariff lines (positions)
for exports of EU agricultural and food products will be phased out. These lines correspond to 95% of the value
of EU agricultural exports to the Mercosur countries. For its part, the EU will liberalize 82% of imports of agricultural
products originating in the Mercosur countries, with the remaining imports subject to partial liberalization
commitments, including tariff quotas for more sensitive products with very few products, which will completely
be excluded.
On the basis of statistics, the agricultural trade of Bulgaria and the EU with the Mercosur countries, in particular
the trade in poultry and beef, has been traced and the importance and possible consequences for these
sectors of agriculture for and from the conclusion of the such an agreement. The exports and imports of Bulgaria
and the EU with the Mercosur countries for a 5-year period are analysed and the trends in trade in the
analysed products and the most important traded products are outlined. The impact of the agreement on the
poultry and cattle sectors has been analysed.Based on the analysis, the following summary conclusions are drawn:
The elimination of customs duties on mutual trade between Bulgaria (respectively the EU) and the Mercosur
countries will affect the livestock sector.
With regard to the estimated tariff quota for beef for import into the EU, 99 000 tonnes of slaughter weight
equivalent (CWE) divided by 55% fresh and 45% frozen by a quota rate of 7,5% on invoice value (volume the
quotas will be allocated in six equal annual stages) – the announced quota cannot be expected to negatively
affect the beef market in Bulgaria (and in the EU) due to the small volume that will increase the supply on the
European market (in the 2018 The EU imported 162 295 tonnes of beef from Mercosur (fresh and chilled and
frozen) and at the conclusion of the agreement this amount would be increased by 16,500 tons per year).
The estimated tariff quota for duty-free imports of poultry meat into the EU – 180 000 tonnes of poultry meat
divided into 50% bone-in meat and 50% boned meat, divided into six equal annual portions of 30 000 tonnes
per year) – duty-free imports would double directions. On the one hand, it is possible to limit exports from Bulgaria
to EU countries, provided that imported poultry meat is expected to be offered at competitive prices (exports
of poultry meat from Bulgaria for 2018 are at an average price of 3.76 EUR/kg to the EU, with almost all
of our exports to the EU countries, and Brazil exports to the EU mainly under code 020714 Edible cuts and offal
from roosters and hens at an average price of US$ 1608/t or US$ 1,608/kg). On the other hand, these imports
are likely to put pressure on domestic production (as a result of the loss of some of the quantities of chicken
and duck meat sold abroad).
agriculture in the context of a comprehensive free trade agreement between the Member States of the European
Union and Mercosur (a bloc comprising Argentina, Brazil, Paraguay and Uruguay).
The new framework for trade – part of a broader association agreement between the two regions – is expected
to consolidate their strategic political and economic partnership and create significant opportunities for
sustainable growth for both countries while protecting the environment and safeguarding interests EU consumers
and sensitive economic sectors.
Studies of the effects of this agreement work with a number of assumptions, since in principle the parties
will proceed to a legal revision to come up with the final version of the Association Agreement and all its
commercial aspects. The Commission will then translate the text into all official EU languages and submit the
agreement of approval to the Council and the European Parliament.
In the field of agriculture, the EU–Mercosur agreement will affect a major abolition and / or phasing in of
customs duties, sanitary and phytosanitary measures, etc. The customs duties of 93% of tariff lines (positions)
for exports of EU agricultural and food products will be phased out. These lines correspond to 95% of the value
of EU agricultural exports to the Mercosur countries. For its part, the EU will liberalize 82% of imports of agricultural
products originating in the Mercosur countries, with the remaining imports subject to partial liberalization
commitments, including tariff quotas for more sensitive products with very few products, which will completely
be excluded.
On the basis of statistics, the agricultural trade of Bulgaria and the EU with the Mercosur countries, in particular
the trade in poultry and beef, has been traced and the importance and possible consequences for these
sectors of agriculture for and from the conclusion of the such an agreement. The exports and imports of Bulgaria
and the EU with the Mercosur countries for a 5-year period are analysed and the trends in trade in the
analysed products and the most important traded products are outlined. The impact of the agreement on the
poultry and cattle sectors has been analysed.Based on the analysis, the following summary conclusions are drawn:
The elimination of customs duties on mutual trade between Bulgaria (respectively the EU) and the Mercosur
countries will affect the livestock sector.
With regard to the estimated tariff quota for beef for import into the EU, 99 000 tonnes of slaughter weight
equivalent (CWE) divided by 55% fresh and 45% frozen by a quota rate of 7,5% on invoice value (volume the
quotas will be allocated in six equal annual stages) – the announced quota cannot be expected to negatively
affect the beef market in Bulgaria (and in the EU) due to the small volume that will increase the supply on the
European market (in the 2018 The EU imported 162 295 tonnes of beef from Mercosur (fresh and chilled and
frozen) and at the conclusion of the agreement this amount would be increased by 16,500 tons per year).
The estimated tariff quota for duty-free imports of poultry meat into the EU – 180 000 tonnes of poultry meat
divided into 50% bone-in meat and 50% boned meat, divided into six equal annual portions of 30 000 tonnes
per year) – duty-free imports would double directions. On the one hand, it is possible to limit exports from Bulgaria
to EU countries, provided that imported poultry meat is expected to be offered at competitive prices (exports
of poultry meat from Bulgaria for 2018 are at an average price of 3.76 EUR/kg to the EU, with almost all
of our exports to the EU countries, and Brazil exports to the EU mainly under code 020714 Edible cuts and offal
from roosters and hens at an average price of US$ 1608/t or US$ 1,608/kg). On the other hand, these imports
are likely to put pressure on domestic production (as a result of the loss of some of the quantities of chicken
and duck meat sold abroad).
Keywords: agriculture trade; beef and poultry; challenges; Mercosur agreement; opportunities
Date published: 2020-06-05
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