EU-Mercosur and EU-Mexico Free Trade Agreements Offer Significant Benefits for European Vehicle Makers

Strategic Insights -

The European Automobile Manufacturers' Association (ACEA) emphasizes the importance of swift ratification of the EU-Mercosur and EU-Mexico Free-Trade Agreements. These agreements will provide significant benefits to European vehicle makers in an increasingly unpredictable global trade environment. The EU-Mercosur Free Trade Agreement will reinforce the EU automotive industry's global competitiveness and resilience. Sigrid de Vries, ACEA's Director General, stated that "Free and fair global trade has underpinned the global success of a competitive European auto industry."

Key Takeaways:

  • The EU-Mercosur and EU-Mexico Free-Trade Agreements offer sizeable benefits for European vehicle makers in an unpredictable global trade environment.
  • Swift ratification of the agreements is imperative to alleviate further pressures at a critical juncture in the green transition.
  • The EU-Mercosur Free Trade Agreement will eliminate tariffs of up to 35% on EU-made vehicles, opening the doors to a market of around 3 million vehicles.
  • The agreement also strengthens Europe's economic resilience by supporting diversified supply chains for critical raw materials, such as lithium, graphite, and manganese, which are essential for the green transition.
  • The EU-Mexico Free-Trade Agreement will modernize rule of origin requirements and address Technical Barriers to Trade (TBTs) in the automotive sector through the inclusion of a motor vehicle annex.
  • The EU-Mercosur and EU-Mexico Free-Trade Agreements could lead to a threefold increase in EU-made automotive goods exports by 2040.
  • ACEA now urges EU decision makers to move forward swiftly with the ratification of both deals.

Statistics:

  • Over 30% of vehicles produced in the EU are exported to international markets, contributing to a €100 billion trade surplus.
  • The Mercosur deal has the potential to create a market of around 3 million vehicles.
  • EU-made automotive goods exports could increase by threefold by 2040.
  • The agreement also strengthens Europe's economic resilience by supporting diversified supply chains for critical raw materials, such as lithium, graphite, and manganese.

Sources:

  • European Automobile Manufacturers' Association (ACEA) News Release, September 3.
  • ACEA Policy Paper, EU-Mercosur Free Trade Agreement: here https://www.acea.auto/files/ACEA_Policy_paper-EU_Mercosur_FTA.pdf.
  • ACEA Fact Sheet, EU-Mercosur Free Trade Agreement: here https://www.acea.auto/files/ACEA_Fact-sheet_EU-Mercosur_FTA.pdf.
  • About ACEA: The European Automobile Manufacturers' Association (ACEA) represents the 16 major Europe-based car, van, truck, and bus makers.