The suspension of Brazilian beef exports to the European Union has increased competitive pressure on Paraguay’s production, especially in the Chilean and U.S. markets. The assessment comes from Daniel Burt, manager of the Paraguayan Chamber of Meat, who also warned of the need for clear rules on distributing any Mercosur quota for the European bloc.
With less room in Europe and a quota imposed by China, Brazil could redirect part of its supply to destinations contested by Paraguay. In Burt’s view, this could lead Brazilian slaughterhouses to compete more aggressively in markets that are strategic for Paraguayan exporters.
Chile is considered particularly sensitive because it buys virtually every cut of the carcass, while other countries concentrate their imports on specific products. Geographic proximity also reduces transport time and costs. “What happens with Brazil is not necessarily positive for Paraguay,” Burt said.
Europe accounts for less than 5% of Paraguay’s export volume, but it has greater commercial importance because it pays high prices for certain cuts and offers consumer niches. The Brazilian restriction comes just a few months after the signing of the free-trade agreement between the European Union and Mercosur, which, in the Paraguayan entity’s assessment, raises questions about the predictability of the negotiated trade opening.
Another point of dispute is the division of the quota that may eventually be allocated to Mercosur. The bloc’s countries — Brazil, Argentina, Paraguay and Uruguay — must determine the distribution internally. Without consensus, the rule would be that the first country to use the quota gets the available space.
The Paraguayan Chamber of Meat advocates an equal share among Mercosur’s members. Burt noted that mechanisms could be created to redistribute the portion not used by one country, as occurs under the system currently applied with Colombia. The health restriction facing Brazil, which had sought a larger share, has made this discussion even more important.
Despite the risk that Brazilian supply could be displaced, Paraguay is going through a period of commercial expansion, with more than 80 markets authorized for its beef. The entity also highlights investment in the sector and improvements in national health-control and traceability systems, considered essential to preserving access to higher-value destinations.