As a longstanding advocate for the EU-MERCOSUR FTA negotiations, a future deal is a priority for European spirits producers, as improved access markets such as Brazil, Argentina, Uruguay, and Paraguay represents a tremendous opportunity for our sector (our current exports to MERCOSUR only amount to €204m per year). In view of the next round of negotiations in Buenos Aires in March, we would like to raise three key concerns:
Firstly, right from entry into force of the agreement, a future deal must deliver a significant level of market access by removing the 20% tariffs applied to spirits, thus permitting European products to compete on a level-playing field. Similarly, tax discrimination, such as the one where we suffer vis-à-vis Cachaça in Brazil, a local spirit that directly competes with EU spirits, should be removed. Year on year our exports to Brazil are declining (-16% since 2015) due to that tax discrimination in favour of local production.
Secondly, any outcome must offer effective protection for our leading Geographical Indications (GIs). In particular, any generic use of European GIs for similar products, either in their original language or in translation, must be forbidden. Furthermore, GIs must not be used in a way to confuse or deceive the consumer.
Thirdly, the deal should remove the technical barriers that hamper access of EU spirits to the MERCOSUR markets. To remove the technical obstacles which are making trade between us complex and costly (eg, customs procedures, administrative processes, etc), we strongly support the inclusion of a Wine and Spirits Annex that solves the non-tariff barriers that we encounter in the MERCOSUR markets and contains guarantees for effective implementation.
