The United States has the opportunity to upgrade its food exports to increase revenues for farmers, but for that to happen it needs to negotiate a comprehensive trade deal with Europe. For reference, America exports more food to Japan, a market of 125 million consumers, than to the European Union, which holds (with its associated trade partners) 450 million inhabitants. While both the Obama and Trump administrations failed to conclude an agreement with Europe, South American nations are about to conclude a comprehensive agreement.
Following the return of Luiz Inácio Lula da Silva to the Brazilian presidency, the European Union expects to finally conclude its trade deal with the South American common market, Mercosur. It had taken the Europeans two decades of negotiation to reach a political agreement for a free trade deal on food, but the agreement was frozen in 2019, given both Jair Bolsonaro’s unwillingness to reach a compromise on environmental protections in the Amazon as well as French and Irish skepticism on the potential competition by Argentinian beef. With Lula back in office, the deal has a good chance of being approved before the EU elections take place next year.
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