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European Union

European Commission Approves Free Trade Agreement with Mercosur, Opening Doors to 700 Million Consumers

Strategic Insights

— 1 min read

The European Commission has approved the Free Trade Agreement (FTA) between the European Union (EU) and the Mercosur bloc of Latin American countries, paving the way for the largest free trade agreement in the world with a market of approximately 700 million consumers. According to the agreement, Mercosur countries will gradually eliminate import taxes for 91% of goods from the EU, benefiting EU businesses and agricultural products. In return, Brazil and its neighboring countries will gain increased access to the EU market for meat, sugar, honey, and soy exports.

Key Takeaways:

  • The Free Trade Agreement (FTA) between the EU and Mercosur bloc of Latin American countries was approved by the European Commission on September 3.
  • The agreement will bring immediate benefits to EU businesses and agricultural products, with Mercosur countries gradually eliminating import taxes for 91% of goods from the EU.
  • The agreement includes the elimination of import taxes on EU goods such as cars, chemicals, wine, and chocolate, which were previously subject to up to 35% tariffs.
  • European businesses are estimated to save over 4.6 billion euros per year, while Mercosur countries gain access to the EU market for meat, sugar, honey, and soy exports.
  • The agreement received strong support from Germany, while Italy held a cautious attitude and requested additional consultations.
  • The FTA negotiations involved extensive discussions on hygienic and environmental standards, which are expected to be a point of contention in the European Parliament.
  • The agreement demonstrates the EU's commitment to diversifying supply chains and strengthening cooperation with reliable partners in the context of geopolitical instability.

Statistics:

  • 700 million: The approximate number of consumers in the Mercosur bloc of Latin American countries.
  • 91%: The proportion of goods from the EU that Mercosur countries will gradually eliminate import taxes for.
  • 4.6 billion euros: The estimated amount of savings for European businesses per year.
  • 49 billion euros: The estimated increase in Mercosur exports to the EU market.
  • 57 billion USD: The equivalent value of the estimated increase in Mercosur exports to the EU market.
  • 35%: The maximum tariff on EU goods subject to import taxes in Mercosur countries.
  • 2025: The copyright year of the article text from Euclid Infotech Pvt. Ltd.
  • 27: The number of member countries in the European Union.

Sources:

  • France 24
  • European Commission
  • Ursula Von Der Leyen
  • An Binh Binh
  • Euclid Infotech Pvt. Ltd.

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