MercoPress. South Atlantic News Agency

Brazil encouraged with UK larger quota for chicken meat and sugar

The Brasilia/London deal on new quota distributions was reached after four years of negotiations to better address the fact UK in no longer part of the EU

Brazil is forecasted to gain a 19.3% larger quota of chicken meat exports to the UK in accordance with the bilateral agreement signed last November 17 at the World Trade Organization (WTO), according to information from the financial press agency Valor.

Quotas allow exporters to sell their products at lower tariffs up to a predetermined amount.

The agreement between Brasilia and London on new quota distributions was reached after four years of negotiations to better address the reality of the United Kingdom not being part of the European Union (Brexit).

As for chicken meat, Brazil’s new quota in the British market will go from 79.92 thousand tons to 95.37 thousand tons, an increase of 15.46 thousand tons. In turn, Brazil’s chicken meat quota in the EU, now with 27 countries, was reduced proportionally to 244.2 thousand tons.

According to sources, Brazilian chicken meat and sugar producers were the most active in these talks to obtain the recognition that the trade flow is growing and gain a larger share of the quota in the United Kingdom.

In effect the sugar quota to the UK increased to 46.5 thousand tons, while it decreased in the EU by the same proportion to 341.5 thousand tons.

The negotiations with the UK revolved around volumes; the existing tariffs were kept the same. There are varying rates for imports of frozen and salted chicken meat into the British market. On specific cuts of salted meat, the in-quota tariff is 15.4% while the volume in excess engenders a fee of GBP 1080 per ton.

During the Brazilian talks with the EU, the bloc agreed to continue advancing the tariff reduction agenda. The UK did not do the same. A quota for raw sugar has an import tariff of 82 pounds per ton, while imports outside the quota entail the collection of 280 pounds/ton.

According to the Brazilian Ministry of Foreign Affairs, Brazil expects the recently agreed-upon regulations to be implemented as soon as possible by the other parties, so that Brazilian exporters can benefit from them in the second half of 2023, when the regular “quota year” for most tariff quotas takes off.

According to a recent Apex analysis, the UK offers a number of erga omnes quotas (destined for all countries) that can benefit Brazilian exporters, including quotas for juices, food preparations, corn, and some fruits, among other products.