The EU deal's quota split will dominate the Mercosur summit as Uruguay takes the helm

The internal distribution of export quotas under the trade agreement between Mercosur and the European Union will dominate much of the debate at the bloc's summit of heads of state, to be held on June 30 in Asunci n, where Paraguay will hand over the six-month presidency to Uruguay. The meeting coincides with the 35th anniversary of the Treaty of Asunci n, the bloc's founding charter.

The agreement's commercial chapter entered provisionally into force on May 1, after more than 25 years of negotiations, but the founding members —Argentina, Brazil, Paraguay and Uruguay— have yet to agree on what percentage of the preferential quotas granted by Brussels corresponds to each. The most sensitive issue is the beef quota, though the dispute also covers products such as poultry, sugar, honey and rice.

The positions differ according to each country's economic asymmetries. Uruguay and Argentina propose distributing the quotas according to the average of what each partner exports to the EU; Paraguay proposes dividing them into four equal parts and claims 25% of each quota, while Brazil advocates a distribution based on each country's share of world trade. Paraguay's deputy trade minister, Alberto Sborovsky, held that his country needs 25% of the quotas to prevent the law of the jungle from prevailing, referring to the current first come, first served system. In practice, that logic is already at work: Argentina exhausted the preferential quotas for honey, eggs and rice within a few weeks, and Brazil sharply increased its poultry shipments to Europe in May.