The agreement will reduce tariffs for a market of more than 700 million people on both sides of the Atlantic, but still needs to be approved by the Parliament and Council of the EU, and by the congresses of the countries of the South American group.
Negotiations on the trade agreement between the European Union (EU) and Mercosur, which began almost 25 years ago, were concluded this Friday, after a handshake between the President of the European Commission, Úrsula von der Leyen, and the leaders of the South. American bloc during a summit in Montevideo.
The agreement, which will reduce tariffs for a market of more than 700 million people on both sides of the Atlantic, still needs to be approved by the Parliament and Council of the EU and by the congresses of the countries of the South American group, of which make up Brazil, Argentina, Paraguay, Uruguay and soon Bolivia.
Long negotiations
Talks began in 2000 but stalled soon after, and it wasn’t until 2019 that the sides reached a broad preliminary agreement, covering everything from tariffs and health standards to intellectual property rules.
After the signing of the preliminary agreement, negotiations stalled again due to European partners’ concerns about the bloc’s environmental standards and the role of agriculture in deforestation, especially in Brazil, then ruled by the far-right Jair Bolsonaro (2019 -2022). ).
An environmental annex to satisfy the EU
The new agreement presented this Friday includes an annex to the chapter on trade and sustainable development, following pressure from European negotiators to include greater guarantees for environmental protection.
The Annex proposes that signatory countries cooperate in implementing international treaties to combat climate change, such as the Paris Agreement, and implement actions to promote sustainable products.
Transfers to Mercosur
The Mercosur countries, in turn, have managed to relax certain parts of the old agreement that they considered harmful in terms of government purchasing and opening up the automotive sector.
The adjustments exclude purchases by the public health sector from liberalization and preserve the government’s ability to purchase technological products from the region as a way to boost the sector.
European divisions
The discussions were fiercely opposed by French authorities, pressured by protests from farmers denouncing the “unfair competition” that the arrival of Mercosur products would bring.
The French President, Emmanuel Macron, kept his finger on the pulse until the end and while Von der Leyen traveled to Montevideo, the Elysée noted that the President had contacted her to express his rejection of the agreement because he found it “unacceptable in its current state.” )”.
On the other hand, the governments of Spain and Germany have supported the signing of the document because of the economic growth it could bring. “Spain will ensure that this agreement is approved by a majority in the (EU) Council,” Spanish government President Pedro Sánchez wrote on Friday.
Impact of the agreement
If the agreement enters into force, it will be the largest trade deal ever ratified by both the EU and Mercosur.
In 2023, the EU was Mercosur’s second-largest trading partner, after China and ahead of the US, accounting for 17% of the South American bloc’s imports worth 55.7 billion euros (about 59 billion dollar), mainly machinery and chemical and pharmaceutical products. products.
Meanwhile, Mercosur was the EU’s 10th largest trading partner last year, with exports worth 53.7 billion euros, mainly minerals and agri-food products, according to Commission data.
Source: EITB
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
