The EU and South American economic bloc Mercosur have clinched a huge trade deal after 20 years of negotiations.
Mercosur consists of Argentina, Brazil, Uruguay and Paraguay.
The agreement brings two continents together, covering a population of 780 million and is expected to save EU companies over €4 billion in duties and set high standards to address issues like the environment and labour rights.
The deal aims to cut or remove trade tariffs, making imported products cheaper for consumers while also boosting exports for companies on both sides.
Longstanding differences made the 20-year negotiations a difficult period for both sides, with Mercosur always demanding for greater access to the EU agricultural market, including for beef and sugar, and the EU aiming for the lowering of automotive-import barriers on behalf of the South American bloc.
The third free-trade agreement of its Lind, after CETA with Canada in 2016 and EU-Japan agreement in 2018, the EU augments itspolitical momentum to EU negotiations with Australia and New Zealand, at the same time, as the G20 heads of state and government meet in Japan with the focus on the US and Donald Trump’s trade war with China and the highly anticipate meeting with China on Saturday.
The EU, the world’s largest trading bloc with more than 500 million consumers is fighting to stem casualties caused by the US tariff policy, and the difficult developments in the World Trade Organization. By securing EU-Mercosur deal, the largest and most complex free-trade agreement, politicians from both sides could not hold back celebrations.
EU Commission chief Jean-Claude Juncker said it was the EU’s biggest deal to date and, at a time of trade tensions between the US and China, showed that “we stand for rules-based trade”. Brazil’s President Jair Bolsonaro said it was “historic” and “one of the most important trade deals of all time”.
“The Mercosur-EU deal is much more than a trade agreement,” said Argentine Foreign Affairs Minister Jorge Faurie. “It’s a strategic advance in Argentina’s position on the global stage that strengthens the commercial agenda of both our country and our bloc.”
