JBS and BRF gain from historic trade deal between EU and Mercosur
02 July 2019
The shares of Brazilian largest meat producers BRF and JBS rose significantly after the EU and Mercosur trade bloc countries (Brazil, Argentina, Paraguay and Uruguay) had signed a historic trade deal, opening the European Union to South American agricultural products. In particular, shares of BRF jumped 9% on Brazil's Bovespa stock exchange, while its rival JBS experienced 5.5% growth.
Under the trade deal, 92% of duties currently imposed on South American imports to the EU are to be eliminated. At the same time, the Mercosur countries are to abolish 91% of customs duties on European imports. South American agricultural products will be imported to the EU within specified quotas of preferential duties, e.g. there will be a quota on 99 tonnes of beef per year at a preferential rate of 7.5 per cent, supplementary quotas on 180,000 tonnes of sugar and 100,000 tonnes of poultry.
In response to the trade deal, European farmers and environmentalists have highlighted the risk of unfair competition and negative impact on climate.