Agreement with Mercosur: the European Commission gives the green light. The wine sector rejoices

The European Commission has authorised the partnership agreement with Mercosur, which will now have to be approved by the 27 EU member states. At the same time, the go-ahead was also given for the updated agreement between the EU and Mexico. “A milestone” – according to the President of the European Commission, Ursula von der Leyen – “EU businesses and the agri-food sector will benefit from lower tariffs and reduced costs. They will become more competitive globally.”

New opportunities for Italian wine

Among the sectors that will benefit from the new agreement is wine, which, after the setback in the United States, needs to look to new markets: “The opening to Mercosur is an important signal in favour of free trade, precisely at a time when it seemed to have been forgotten. These are the trade agreements we like,” commented the President of Unione Italiana Vini, Lamberto Frescobaldi, adding: “For the wine world, partnership with a Latin population of 270 million inhabitants certainly represents a business opportunity. Today, with US tariffs, the watchword is to diversify a commercial spectrum still too concentrated on a few outlet markets, the USA above all.”

Goodbye to tariffs for Argentina and Brazil

Import tariffs in Mercosur countries – Argentina, Brazil, Uruguay and Paraguay – are currently quite high (up to 27%), but the agreement provides for a gradual reduction of these rates. With Mexico, on the other hand, the tariff regime is already at 0%, but the new agreement provides for a wine agreement aimed at simplifying non-tariff rules and offering greater protection for geographical indications.
“Let’s be clear: Brazil and Mexico cannot offset the losses we are suffering in the US market. However, they are dynamic wine markets, where European wines are highly appreciated and where we see significant growth opportunities,” said Ignacio Sánchez Recarte, Secretary General of the CEEV. “In the current period of tariff uncertainty, the new agreement will remove Brazil’s 27% tariff on EU wines, a serious obstacle to the competitiveness and growth of our companies.”

Towards ratification

Now, however, attention must turn to the timeline for ratification, as recalled by the President of the CEEV, Marzia Varvaglione: “We urge the European Parliament and the Council to move forward swiftly with the ratification process so that wine companies and wine consumers on both sides can benefit without delay from these historic agreements.” A path that will not be without difficulty, given the many obstacles along the way. And it is not yet certain that all EU member states will be in favour.

Italy the third supplier to Brazil

But how much wine does Europe ship to these countries? According to the CEEV, wine exports from the Old Continent to Brazil have exceeded €200 million, while those to Mexico have reached a similar level (€198 million). In particular, according to the UIV Observatory, Brazil – the leading buyer among the four South American countries – closed the first half of the year with a growth in Italian wine orders of 5.5% in value, reaching €18.5 million, with still/sparkling wines up by 8.5%. In a market that, also due to tariffs, is dominated by Chilean producers (€186 million) and Argentine wines (€90 million), the leading supplier is Portugal (€75 million), followed by France (€50 million) and Italy with €40 million. These figures are set to grow considerably thanks to the possible progressive elimination of a tariff that currently weighs in at 27%.