The historic Mercosur Agreement, which united the European Union with four other Latin American countries in a huge (almost) duty-free market, has ended. These are Argentina, Brazil, Paraguay and Uruguay. The news was announced on December 6 by European Commission President Ursula von der Leyen, who was in Montevideo, Uruguay, to approve the agreement. After 25 years of negotiations, Brussels was rushing to shut down amid fears of trade disputes with China as well as possible new tariffs from Donald Trump. The agreement envisages the almost complete removal of taxes on goods exported and imported from EU countries to relevant Latin American countries.
The agreement concerns the agri-food sector (which has been at the center of bitter wars), as well as a range of raw materials such as minerals (see lithium, needed for electric car batteries), machinery and equipment. In this final phase, Germany and Spain were pressing for “yes”, while France and Poland were openly opposed, eventually finding the support of Italy, which did not want to antagonize an agricultural sector that was openly opposed to the terms of the agreement. . In this article, we wrote comprehensively about which countries and sectors benefited from the agreement and which did not.
Result of Mercosur talks in Uruguay
A free trade agreement was signed between the EU and Mercosur, the Latin American free trade area consisting of Argentina, Brazil, Paraguay and Uruguay; Bolivia is on hold to complete its accession process and Venezuela is suspended due to internal problems. European Commission President Ursula von der Leyen said on the morning of December 6, “We have completed the negotiations on the EU-Mercosur agreement. Now I look forward to discussing it with the EU countries.” “This agreement will work for both people and businesses. More jobs. More choices. Shared prosperity,” he added in his post on his X account.
The agreement came after intense negotiations that lasted nearly 25 years and faded and revived depending on the political and economic dynamics. Von der Leyen insisted on reaching a conclusion in her first term. It has now reached its conclusion, despite fierce opposition from French farmers and the Paris government.
“We are creating a market for 700 million people. Trade agreements go beyond economics, reflect our shared values, and the EU-Mercusur agreement reflects our determination against deforestation and our commitment to the implementation of the Paris agreements,” the EU executive leader said. He spoke of a “win-win agreement” at a press conference in Montevideo. Talking about a historic day and thanking the leaders, he said, “Europe’s strategic investments will be facilitated and will affect sectors connected to people’s daily lives. Addressing the Europeans, I say: this agreement is a victory for the EU.” to the negotiators “for their commitment and determination”.
Reaction of right and left in the European Parliament
In recent months, both Germany, led by Chancellor Olaf Scholz, and Spain, led by Prime Minister Pedro Sanchez, have contributed to supporting von der Leyen’s work. Both are part of the socialist family. However, the Socialists and Democrats (S&D) group in the European Parliament reacted cautiously to von der Leyen’s statement. “S&D will now undertake a comprehensive assessment of the agreement and its consequences. We look forward to starting the parliamentary process with full transparency and dialogue with all parties,” the group wrote on political group Popolari’s X account. The family to which von der Leyen belongs.
“The agreement simplifies exports, reduces tariffs and sets standards, creating significant job opportunities and economic growth in Europe. This is a necessary boost for the EU’s competitiveness,” said EPP’s Jorgen Warborn. The group’s international trade spokesman. The liberal Renew group, which is mostly French and opposes the agreement, reacted negatively. Also harsh condemnation from the Green group and La Sinistra (Left), of which Movimento5Stelle is a part.
Next steps of the EU-Mercosur agreement
However, the agreement will need to be discussed and approved by both the European Parliament and the EU Council, which brings together the heads of state and government of the member states. France is determined to form a minority bloc along with Italy and Poland to prevent the Treaty from entering into force. French farmers, who have been taking to the streets to oppose Mercosur since mid-November, vowed to “toughen up” their protests following von der Leyen’s announcement.
Copa-Cogeca, the influential agricultural lobby in Brussels led by Italian Massimiliano Giansanti, reacted with disappointment, highlighting the vulnerability of farmers to Latin American products that will come to Europe at very low prices and without the necessary health guarantees. Offered by EU manufacturers. The organization announced that a “flash action” will be held in Brussels on Monday, December 9, when the Agriculture Ministers of the Member States will gather in the European capital for the regular monthly council.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
