By Gilbert Le Gras
BUENOS AIRES, Feb 28 (Reuters) - Agriculture officials from Brazil and Argentina, South America's leading food producers, signed a food safety protocol in Buenos Aires on Monday as well as a "Made in Mercosur" marketing plan.
South America's two largest economies also agreed to join forces in their battle to strip away European Union export subsidies on agricultural goods which pressure world prices.
Brazilian Agriculture Minister Marcus Vinicius Pratini de Moraes and Argentine Agriculture Secretary Antonio Berhongaray signed the food safety standard, which will be discussed with counterparts from Mercosur partners Paraguay and Uruguay and Mercosur associate Chile on Tuesday.
Mercosur is the world's third-largest trade bloc and a major food exporter to the global marketplace. Brazil is the world's largest sugar producer and biggest grower and exporter of coffee. Brazil and Argentina are the world's second- and third-largest soybean producers and a quarter of the world's cattle herd feeds on the grasslands of Mercosur member nations.
Pratini and Berhongaray spent most of Sunday discussing how to present a united front against EU subsidies ahead of an April 5 meeting with the European trade bloc in Buenos Aires.
The European customs union buys about 20 percent of world farm exports and Mercosur nations complain the EU is protectionist, depriving them of market share and keeping prices low.
The European Commission authorized trade negotiations on non-tariff aspects exclusively, setting aside talk of dismantling customs duties until after 2001.
But Mercosur members want to discuss all issues especially those it considers market distorting such as tariff barriers and EU export subsidies.
Berhongaray and Pratini also discussed trade with Chile after that country's decision last month to apply safeguards to vegetable oil, sugar and wheat imports. Those products are important exports from both Brazil and Argentina to Chile.
Chile said the safeguards were put in place to ensure the smooth functioning of trading bands to protect domestic producers from price fluctuations.
Under the World Trade Organization (WTO), Chile promised a maximum tariff of 31.5 percent for products with trading bands. But the newly installed tariff is 50 percent for wheat, 40 percent for vegetable oils and 90 percent for sugar.
Recent declines in international prices led Chile to levy additional tariffs on those commodities to reach the floor of the trading band, which was $194 a ton for wheat.
Chilean President-elect Ricardo Lagos campaigned on a promise to make his nation of 15 million people a full member of Mercosur which already counts 213 million people with a combined economic output of $1 trillion.
The socialist leader is to be sworn in March 11.:
