EU and Chile meat sectors could benefit from revised trade deal

By Charles Newbery, Diana Yordanova and Keith Nuthall

20-Nov-2017 - Last updated on 20-Nov-2017 at 12:11 GMT

Chile could pump more beef into Europe, but would truculent EU farmers welcome such as move?

The Chilean meat and livestock industry has welcomed the launch of talks between the European Union (EU) and the South American country on upgrading the current 14-year-old free trade deal between the two jurisdictions.

A first round of talks was due to begin on Thursday (16 November), with the goal of deepening existing agreements, so that they also address non-tariff barriers such as health import controls. These are of particular importance to Chilean exporters – the country exports significant volumes of meat and livestock to the EU.

Speaking to GlobalMeatNews, Francisco Cox Aldunate, general manager of the Chilean Meat Association (Asociación Chilena de la Carne - ACHIC), said he expected beef exports to increase thanks to the revision of the trade deal. “Any agreement is considered a benefit for meat exports to the EU,” he said.

The expected growth in exports would come after a sluggish year, as a strong local currency pushed up livestock prices in Chile, making its beef more expensive for EU buyers, Cox Aldunate said. With an upgrade to the trade deal, he expected demand for Chilean beef to increase in the EU, in particular for rump and loin, two of the preferred cuts in that market.

‘Modern’ meat deal with Chile

Looking at data supplied by the European Commission’s trade directorate general, the EU imported €2 billion’s worth of live animals and food (of all kinds) from the Latin American country, up 1.8% year on year. EU imports of selected pigmeat products, however, dropped 28%, falling to 1,521 tonnes (t) between January and August this year compared to 2,958t in the same period during 2016.

EU statistical service Eurostat indicated a major jump in EU exports of meat and edible meat offal to Chile – up to €18.4m from €8.8m in 2015 and €4.8m in 2014, with pigmeat being by far the largest category – at €12.1m in 2016. Chilean exports to the EU of meat and edible meat offal were worth €83.6m in 2016, up from €81.9m in 2015. Here, poultry is the most important sector, at €47.8m in 2016.

Commenting on the launch of the talks, EU trade commissioner Cecilia Malmström said it was “excellent” that the EU Council of Ministers had authorised her officials to launch “trade negotiations for a modern agreement with Chile”.

A second round of trade talks is expected to take place between the two sides early next year (2018).