The EU's Mercosur agreement with several South American countries poses a threat to US trade interests in Latin America, according to representatives of the US meat and dairy sectors. They want action taken.
Their signals haven't yet prompted President Trump to take action, but according to US industry associations, they risk being left behind by the provisions of the Mercosur agreement and thus losing significant market share in a market of some 700 million consumers.
Fear of 'monopolies'
The organizations even speak of a potential monopoly position for European and Latin American companies within the new free trade zone. They also strongly object to the fact that the Mercosur agreement recognizes European geographical protections for a range of products, such as Parma ham, feta, and specialty wines.
Mercosur provisionally launched
The Mercosur treaty is not yet fully in force, but a partnership agreement and an interim trade agreement were signed in Paraguay on January 17, which will allow for the easing of bilateral trade.
On January 21st, the European Parliament threw a wrench in the works by demanding a ruling from the European Court of Justice on the trade agreement first. The member states also still need to give their final approval to the treaty. In the meantime, trade is expected to resume.
Cheap potash
Whether the US will retaliate against the EU and its South American partner countries remains to be seen. The US government has actively focused on protecting its own agricultural trade interests. Several countries and trading blocs have already faced tariff increases or threats of tariffs. The Trump administration has also lifted several sanctions between Russia's partners to help its own farmers. For example, since the end of last year, potash and other fertilizers from Belarus have been exported to the US at a very low tariff, while the EU continues to maintain sanctions against Belarus for its support for the Russian invasion of Ukraine.