EU Presents Treaty Proposal for Mercosur Trade Agreement, Ahead of European Council Approval

Strategic Insights -

The European Union took a major step towards finalizing the historic trade agreement with Mercosur by submitting its treaty proposal for approval by the European Council, marking a significant milestone in the agreement's ratification process. The proposal aims to alleviate concerns from French farmers, who had been resistant to the deal, by introducing "robust safeguards" to protect European agricultural interests. The European Commission's plan to present the agreement in two separate parts - one for ratification by the European Parliament and another for provisional application - aims to bypass the need for national and regional parliaments' approval.

Key Takeaways:

  • The European Commission proposes to conclude the agreement with Mercosur in two separate parts, one for European Parliament ratification and another for provisional application, to bypass national and regional parliaments' approval.
  • The agreement includes "robust safeguards" to protect European agricultural interests, including limiting preferential agri-food imports from Mercosur to a fraction of EU production and recalling that the agreement establishes safeguards that protect sensitive European products against harmful increases in imports from Mercosur.
  • The EU-Mercosur Partnership Agreement (EMPA) and the Modernized EU-Mexico Global Agreement are two parallel legal instruments that require separate approval from the European Parliament and member states before they can enter into force.
  • The agreement is expected to increase EU exports to Mercosur by up to 39%, supporting more than 440,000 jobs across Europe, and reduce Mercosur's duties on key industrial products like automobiles, machinery, and pharmaceuticals.
  • The EU expects the agreement to facilitate EU company investment in fundamental supply chains, including critical raw materials and related goods, with a high level of environmental and labor protection.
  • The agreement will also end "unfair competition" from Mercosur products that imitate authentic EU products, protecting EU geographical indications.

Statistics:

  • The EU-Mercosur Partnership Agreement (EMPA) is expected to increase EU exports to Mercosur by up to 39%, supporting more than 440,000 jobs across Europe.
  • EU agri-food exports to Mercosur are expected to grow almost 50%, with falling import tariffs in Brazil, Argentina, Paraguay, and Uruguay on key EU agri-food products, such as wine and spirits, chocolate, and olive oil.
  • The agreement aims to reduce Mercosur's duties on key industrial products like automobiles (currently 35%), machinery (14-20%), and pharmaceuticals (up to 14%).

Sources:

  • "European Commission, A way out to the Mercosur agreement" (link to source material not available)
  • "Financial Times, Editorial" (link to source material not available)
  • "European Commission, Statement by President Ursula von der Leyen" (link to source material not available)