EU and Mercosur, free trade agreement signed. A market worth 25% of global GDP
The European Union and the Mercosur trade bloc have agreed terms for a long-awaited free trade agreement. The agreement aims to create one of the largest free trade zones in the world, covering more than 700 million people and almost 25% of global GDP. Just like the US-Mexico-Canada Free Trade Agreement, its aim is to reduce tariffs and trade barriers, making it easier for companies on both sides to export goods.
from our correspondent Beda Romano
2' min read
2' min read
BRUSSELS - After lengthy negotiations, the European Commission finalised the trade agreement with Mercosur today, Friday 6 December. The announcement came from Montevideo, where EU executive president Ursula von der Leyen attended the meeting of heads of state and government of the Latin American organisation, in which Brazil, Argentina, Uruguay and Paraguay participate. An uncertain approval process now opens at European level.
"The ties between our countries are among the strongest in history," said Ms von der Leyen at a press conference broadcast live. "The understanding was negotiated with the aim of coming to the benefit of businesses. It wants to offer good jobs, good choices, good prices (...) The agreement is not only an economic opportunity, it is also an economic necessity in a world increasingly marked by tensions. The treaty confirms that democracies can count on each other'.
"This agreement is a victory for Europe," he added. "Around 60,000 companies currently export to Mercosur. From today they will be able to enjoy tariff reductions (amounting to four billion euro per year, ed.) and new and generous economic opportunities (...) We have listened to the concerns of farmers. The agreement contains robust safeguards. 350 geographical denominations will be protected and our health standards will remain unchanged'.
"This agreement does not only have a commercial dimension. It has a much higher value. It does not offer a magic solution, but it is certainly an opportunity,' said Uruguayan President Luís Lacalle Pou, who also spoke on behalf of the other Mercosur member countries, all of whom were present at the press conference. "I know there are ideological differences between our Latin American countries, but the understanding has been welcomed by all of us," he said.
The trade agreement with Mercosur has long been a source of tension between the Twenty-Seven. A first agreement reached in 2019 foundered. From Brussels, an EU spokesman, Olof Gill, explained that the ratification of the new treaty will depend on the nature of the agreement in the eyes of the European Commission. If the deal is limited to trade aspects, it could be approved by the Parliament and the Council by majority vote, without ratification at national level.
