Mercosur fails to agree on sugar


27 July 1998


Mercosur fails to agree on sugar


SUGAR is one of two products at the heart of an intractable disagreement between leaders of the Latin-American trading bloc Mercosur – the body which hopes to develop a trade pact with the European Union. The other bone of contention is vehicle manufacturing.

Brazil is concerned by the failure to make progress on the ban on exports of its sugar to Argentina. Tariffs are due to stop by 2001, but Argentina slapped a 20% freezing duty on Brazils sugar last September. Argentina says it wants to protect its own domestic production.

Brazil is making agreement on other sectors conditional on an agreement on sugar. Mercosur involves Paraguay, Uruguay, Brazil and Argentina, and Chile as an associate member.

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