EU Approves Trade Deal with Mercosur Amid Controversy

Strategic Insights -

The European Union Commission signed off on a significant trade deal with South American bloc Mercosur on Wednesday, paving the way for member states to approve it. The deal must be ratified by at least 15 of the European Union's 27 member states to take effect. The agreement aims to eliminate tariffs on 91% of EU imports from Mercosur countries, including Brazil, Argentina, Bolivia, Paraguay, and Uruguay. In return, Mercosur members would gain access to the EU market with fewer restrictions on agricultural goods.

Key Takeaways:

  • The trade deal between the EU and Mercosur has been in the works since 1999, with talks stalling several times.
  • The agreement would progressively remove tariffs on 91% of EU imports, including cars, machinery, and pharmaceuticals, from Mercosur countries.
  • Mercosur members, including Brazil, Argentina, Bolivia, Paraguay, and Uruguay, would gain access to the EU market with fewer restrictions on agricultural goods.
  • The French government has expressed reservations about the deal, citing concerns over unfair competition from abroad.
  • The EU Commission has promised "robust safeguards" to protect EU agricultural sensitivities and shield sensitive products from any surge in imports.
  • The deal with Mexico, which was also approved by the Commission, is expected to benefit EU agriculture exporters, given Mexico's status as a net food importing country.
  • Mercosur has also signed a trade deal with the European Free Trade Association (EFTA) in July, further expanding its trade ties with the EU.

Statistics:

  • 91% of EU imports from Mercosur countries would be subject to tariff reductions under the trade deal.
  • 15 of the European Union's 27 member states must approve the trade deal for it to take effect.
  • The deal has been in the works since 1999, with talks beginning in that year.
  • Mercosur accounts for 30% of EU's trade with Latin America.
  • The EU is doubling down on its "diversification" of trade ties, according to EU Commission President Ursula von der Leyen.

Sources:

  • "EU Commission Sign Offs on Major Trade Deals with South America's Mercosur and Mexico" by Brussels Morning
  • "EU approves trade deal with Mercosur, Mexico" by Euractiv
  • Edited by: Jenipher Camino Gonzalez.