The agreement opens up opportunities for several Brussels-based companies, both large and small...
In Brussels, we are well aware that signing an agreement can take time. This is true for regional policy as well as for free trade agreements concluded by the European Union. Negotiations with four of the five countries that make up Mercosur - Argentina, Brazil, Paraguay, and Uruguay-began in 1999. But following the green light given by a majority of member states in mid-January and the vote by the European Parliament, these negotiations are finally coming to fruition.
The text, to which Bolivia is not a party provides for the elimination of more than 90% of customs duties between the two trading blocs in order to stimulate European exports of industrial products. In return, it establishes preferential import quotas for agricultural products originating in South America.
A few weeks ago, Beci joined forces with FEB, VOKA, AKT, UNIZO, and AVED to welcome the outcome of the discussions between Member States, paving the way for the agreement signed by Ursula Von der Leyen on January 17.
Chemicals, pharmaceuticals, machinery, and agri-food
In fact, the potential for growth in trade with Mercosur is very high. While Belgium already imports coffee, orange juice, soybeans, meat, and cereals, the agreement should also enable it to boost its access to the region's significant mineral resources: iron and steel, as well as several critical raw materials that are essential to its industry.
Furthermore, with a value of nearly €3 billion per year, the region currently accounts for less than 1% of Belgian exports of goods, according to the latest report on this subject by the FPS Economy. The prospects offered by this market of 270 million people are therefore attractive. Today, chemicals and pharmaceuticals (30%) and mineral products (30%) account for the lion's share of Belgian exports to Mercosur, ahead of machinery and electrical equipment (10%) and agri-food products. The report highlights medicines, vaccines and medical devices, chemical compounds, mineral oils, zinc, and automotive and aviation parts as the main export products. For Belgium, the agreement will result in the virtual elimination of customs duties in several of these key sectors: chemicals, plastics, chocolate, textiles, and life sciences.
Les entreprises bruxelloises concernées
Brussels-based companies were quick to recognize this opportunity. Around 50 companies accompanied the royal mission to Brazil at the end of 2024. These included giants such as UCB, Solvay, Fluxys, Tractebel, and Euroclear, several major banks and law firms, as well as The Belgian Chocolate Makers and a number of SMEs. Among them was Fyteko, which specializes in plant biostimulants. Similar to a vaccine, its biomolecules activate the natural defenses of seeds in the event of severe drought, thereby strengthening the plants' resistance to water stress.
“Belgium is probably not the best country to market an anti-drought product,” smiles Guillaume Wegria, co-founder and CEO. “So we have always focused on exports.” While the scale-up has developed successfully in Europe - its products now cover nearly one million hectares - Latin America and its large corn plantations are also part of its markets. It also has a subsidiary in Brazil.
The geostrategic nature of the Mercosur agreement resonates particularly strongly with the CEO. “Our business is directly impacted by macroeconomic risks, whether it be Covid, the war in Ukraine, or US protectionism,” he emphasizes. Beyond that, and even though he is somewhat concerned about the additional pressure the agreement could put on the European market, he is delighted with the new opportunities in South America that it should open up. "One of our products is currently subject to a 6% import tax in Brazil. Another is taxed at 14% or 18%, depending on the case. With the agreement, they will drop to 0%, allowing us to better compete with our rivals, particularly in the US. The timing is right to revive trade with the region. In fact, I will be traveling to Brazil and Argentina in the coming weeks," he says.
The EU-Mercosur agreement opens up new opportunities for your products. Whether you are in the chemical, agri-food, or tech industries, Beci and its partners can help you navigate these new customs rules.