Eu Mercosur Trade Agreement Factsheet

EU-Mercosur Trade Agreement Factsheet

The European Union (EU) and Mercosur (a South American trade bloc comprising Argentina, Brazil, Paraguay, and Uruguay) have been working on a comprehensive trade agreement for nearly two decades. After years of negotiations, the parties finally reached a political agreement on June 28, 2019. Here is a quick factsheet on the EU-Mercosur trade agreement.

1. Economic significance: The EU is Mercosur`s second-largest trading partner after China, with trade worth €88 billion ($98 billion) in 2018. The EU is also Mercosur`s largest foreign investor, with €385 billion ($429 billion) in investment stock in 2017. The trade agreement is expected to boost trade and investment flows between the two regions.

2. Tariff reductions: The EU-Mercosur trade agreement aims to eliminate tariffs on 93% of Mercosur`s agricultural exports to the EU, including beef, poultry, sugar, and ethanol. The EU, in turn, will benefit from reduced tariffs on its exports to Mercosur, such as cars, chemicals, and machinery.

3. Environmental and labor standards: The EU-Mercosur trade agreement includes a commitment to uphold environmental and labor standards. Mercosur commits to implementing the Paris Agreement on climate change, while the EU will ensure that Mercosur`s products meet its standards on issues such as animal welfare and sustainable forestry.

4. Intellectual property protection: The EU-Mercosur trade agreement strengthens intellectual property protections, particularly for European geographical indications (GI) for food and drink products such as Parmigiano Reggiano and Champagne. Mercosur will recognize over 350 European GIs.

5. Controversies: The EU-Mercosur trade agreement has faced opposition from environmentalists, farmers, and labor rights groups. They argue that the agreement will lead to increased deforestation in the Amazon rainforest, damage to European farmers, and exploitation of workers in Mercosur countries. Some EU countries, such as France and Ireland, have threatened to veto the agreement because of these concerns.

6. Ratification process: The EU-Mercosur trade agreement needs to be ratified by all EU member states and the European Parliament. This process could take several years as some countries, such as Belgium and Austria, have already raised concerns about the agreement`s environmental and social impacts.

In conclusion, the EU-Mercosur trade agreement is a significant milestone in the economic relations between the two regions. However, it remains controversial and faces several roadblocks before it can come into effect. The agreement`s impact on the environment, labor rights, and farmers in both regions needs to be carefully examined before it can be ratified.