`Argentina Olive Oil Restrictions Threaten EU-Mercosur Deal - Olive Oil Times
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Argentina Olive Oil Restrictions Threaten EU-Mercosur Deal

By Daniel Williams
Jul. 14, 2010 15:18 UTC

EU-Mercosur Trade Agreement Talks at Risk Due to Supposed Argentinean Restrictions Against European Olive Oil Imports

Negotiations between the European Union and Mercosur seek­ing to develop a free trade agree­ment are cur­rently in dan­ger because of sup­posed Argentinean restric­tions against the entrance of cer­tain European food imports, specif­i­cally olive oil. In response to Argentinean food import restric­tions imple­mented by Argentina’s Domestic Commerce Secretary Guillermo Moreno, the European Union has con­sid­ered rais­ing these con­cerns to the World Trade Organization.

Mercosur is a Regional Trade Agreement (RTA) between Argentina, Brazil, Paraguay and Uruguay founded in 1991 by the Treaty of Asunción, which was later amended and updated by the 1994 Treaty of Ouro Preto. Its pur­pose is to pro­mote free trade and the fluid move­ment of goods, peo­ple, and cur­rency.

Joao Aguiar Machado, EU Deputy Director-General for External Relations said that, ​“the prob­lem is that apart from their direct impact on trade, these mea­sures erode the con­fi­dence needed to develop these nego­ti­a­tions.”[1] Aguiar Machado fears that, ​“this par­tic­u­lar issue could con­t­a­m­i­nate the atmos­phere of the trade dis­cus­sions.” 1

The Argentinean author­i­ties, specif­i­cally cur­rent pres­i­dent Cristina Kirchner and her min­is­ters, have denied the exis­tence of any such restric­tions against European prod­ucts and counter that the Mercosur-EU trade talks are not the appro­pri­ate forum to address such a bilat­eral issue.

In response, Aguiar Machado notes that while these restric­tions may not exist on paper, they are very real and evi­denced by Argentinean, ​“inter­nal com­mu­ni­ca­tion… talk­ing about impair­ing devices. Containers are blocked in ports and there is no way to deny this.“1

Argentina President Cristina Kirchner

This back and forth is not the only imped­i­ment to the EU-Mercosur talks, how­ever. France leads another dozen European coun­tries in a protest of this poten­tial free trade agree­ment, argu­ing that the lower costs of pro­duc­tion from cheap labor in South America would neg­a­tively affect European olive oil pro­duc­ers who already face finan­cial crises and prices that con­tinue to plum­met.

The break­down of these talks could poten­tially be dis­as­trous for both sides, as EU-Mercosur trade rep­re­sents almost as much as EU trade with the whole of Latin America taken together. Additionally, the EU is Mercosur’s pri­mary mar­ket for agri­cul­tural exports, account­ing for some 19.8% of total EU agri­cul­tural imports in 2009.[2]



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