Free Trade Agreement between Mercosur and EU: What You Need to Know
The Mercosur-EU Free Trade Agreement is a trade deal between two of the largest economies in the world – the EU and the South American trade bloc, Mercosur. This agreement, which has been in negotiations for nearly two decades, is expected to significantly boost trade between the two regions.
The deal was finally agreed upon in June 2019, after years of difficult negotiations. This is considered to be the largest trade agreement that the EU has ever signed. The agreement aims to remove tariffs on goods and services, as well as improve access to markets, promote investment, and protect intellectual property rights.
What is Mercosur?
Mercosur is a trade bloc consisting of Argentina, Brazil, Paraguay, Uruguay, and Venezuela. Venezuela is currently suspended from the bloc due to political issues. Mercosur was formed in 1991 as a way to promote free trade and economic integration between the member countries.
What is the EU?
The EU, or the European Union, is a political and economic union of 27 member states located primarily in Europe. Its member states share a common market and customs union, allowing for the free movement of goods, capital, and people.
How does the Free Trade Agreement between Mercosur and the EU work?
The Mercosur-EU Free Trade Agreement will remove tariffs on 91% of goods traded between the two regions. Some agricultural products, such as beef, will remain subject to tariffs for a transitional period. The agreement also includes provisions for protecting intellectual property rights, promoting investment, and addressing non-tariff barriers to trade.
The deal is expected to boost trade between the two regions significantly. The EU is already Mercosur’s largest trading partner, accounting for over 20% of its total trade. According to the European Commission, the agreement is expected to increase EU exports to Mercosur by around 45%, providing a significant boost to the European economy.
The deal has not been without criticism. Environmental groups have raised concerns about the impact on the Amazon rainforest, while farmers in some EU countries have raised concerns about the impact on their industries.
In conclusion, the Mercosur-EU Free Trade Agreement is a landmark deal that has the potential to significantly boost trade between two of the largest economies in the world. While there are concerns about the environmental and economic impact of the deal, it is clear that the agreement will bring benefits to both regions.