The European Union has signed a landmark trade deal with South America’s four largest economies.
European Commission President Ursula von der Leyen called the agreement a “truly historic milestone” in an “increasingly confrontational world”.
ONE previous agreement in 2019 never entered into force because not all EU member states were willing to ratify it.
If the deal is ratified by EU nations, it would mean companies trading between the two regional blocs would charge each other lower taxes, use simpler customs procedures and it would be easier for the EU to enter the EU. closer to raw materials.
Ms von der Leyen told reporters in Montevideo that this was in the interests of Europeans. “That means more jobs and better jobs, more choices and better prices,” she said.
Last year, Europe sold nearly $59 billion in goods to Argentina, Brazil, Paraguay and Uruguay.
The deal is aimed at increasing exports of goods including cars, machinery, chemicals and pharmaceuticals at a time when trade tensions are rising with other parts of the world, especially the US and China. .
Last year, nearly $57 billion worth of goods went in the opposite direction, with minerals such as lithium and nickel as well as meat and vegetables among the top sellers.
These minerals are vital for batteries in electric vehicles, and this trade deal will make it easier for European automakers to get hold of the huge quantities they are expected to need in the coming years. .
With the two blocs comprising 700 million consumers and about 20% of global economic output, leaders on both sides are hoping that number will increase if the deal takes effect.
The EU says 60,000 of its companies are also exporting to Mercosur members and half of them are small businesses.
Negotiations first began in 2000. A previous deal in 2019 did not enter into force after EU members failed to ratify it amid concerns over environmental protection including sustainable farming and deforestation.
Trade policy is negotiated by the European Commission rather than member states but France, Italy and Poland have all expressed reservations about the current deal and the challenge for Brussels will be to convince all This country ratified it.
Farmers in France and Poland expressed concern that they would be subjected to unfair competition because European regulations for their industries are more stringent and more costly to comply with than European regulations. competitors in South America.
In a defiant social media post shortly after the announcement, French trade minister Sophie Primas said: “What is happening in Montevideo is not the signing of an agreement but simply is the political conclusion of the negotiations. This is not binding on the member states.”
She added that “France will fight at every stage together with member states that share the same vision.”
The potential boost to foreign trade will be particularly welcomed by Germany, where exporters are struggling amid a broader economic slowdown.
Government spokeswoman Christiane Hoffmann said the deal was “a unique opportunity for an agreement that we must not miss” and that Germany was working to find a compromise in the face of French concerns.
