What is the Mercosur deal?
Asked 5 hours ago
Answer
The Mercosur deal is a proposed trade agreement between the European Union and the Mercosur bloc (Argentina, Brazil, Paraguay, Uruguay) to create a large market by eliminating or reducing tariffs, aiming to boost economic ties and competitiveness. The deal faces political hurdles and opposition from various sectors in Europe.
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All eyes on Italy as Mercosur deal hangs in the balance
- Mercosur includes Argentina, Brazil, Paraguay, and Uruguay
- EU-Mercosur deal would create a 780 million consumer market 7s
- European exports to Mercosur face high tariffs up to 35% 17s
- The agreement would eliminate or reduce these tariffs 33s
References
Mercosur is a South American trade bloc comprised of Argentina, Brazil, Paraguay, and Uruguay. The agreement with the EU will create a market of 780 million consumers, representing 25% of world trade. Many European products currently face high export tariffs to Mercosur: cars – 35%, wine and spirits – up to 35%, cheese – 28%, machinery – up to 20%. With the deal, those tariffs will be eliminated or significantly reduced.
The European Commission aims to sign the Mercosur Agreement, viewing it as crucial for economic, diplomatic, and geopolitical reasons after 25 years of negotiations. French farmers and officials oppose it due to concerns about competition from Latin American imports. The final decision rests with the EU Council, with lawmakers voting on safeguard clauses and reciprocity amendments.
The Mercosur agreement could create a market of 700 million people between Europe and South America. The European Parliament is set to vote on trading safeguards to prevent market disruption and unfair competition; if approved, the deal will move forward but still requires ratification. Failure to ratify would mean losing a strategic partner for the EU.