Vulcan Insight

EU and Mercosur countries reach a trade deal

5 July 2019

After 20 years, the EU and Mercosur founding members Argentina, Brazil, Paraguay and Uruguay have concluded a momentous trade deal. The negotiations started in 1999, with talks intensifying in 2016. The deal is the largest ever negotiated by the EU covering 773 million people and is set to save European companies over €4 billion in duties per year, four times more than the trade deal with Japan. As well as removing the majority of tariffs on EU exports, the deal covers geographical indicators, access to public procurement contracts and greater freedom to provide services. The EU has emphasised that the deal also promotes high standards – the two blocks have committed to effectively implementing the Paris Agreement, all food imports will have to comply with EU standards, and the deal also covers labour rights.

Outgoing President of the European Commission Jean-Claude Juncker called the moment “historic” but it was long known that the deal would bring controversy. In particular, criticism has come from Ireland, France and Poland, as agriculture lobbies argue that the deal will harm the farming sector and food safety standards. The deal will need to be approved by EU governments, the European Parliament, and around 40 national parliaments. The Commission has sought to defend itself against the criticism, emphasising the high environmental and sustainability standards, while policy experts have suggested the beef quota will have a marginal impact. The Commission has also noted the trade deal’s importance in bolstering the international trading system in the face of current challenges.


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