The EU-Mercosur agreement is reportedly the largest and most ambitious trade agreement ever negotiated by both sides, providing regulatory certainty for both trade in goods and services, and establishing better trade links between countries of respectively 440 and 260 million citizens. The agreement will enable both regions to recover from the current economic and public health crisis, invest in the green transition and diversify global supply chains and core market base.
Exactly two years after the agreement was signed, CEC & 12 EU associations call on decision-makers on both sides to speed up the ratification process so that EU companies can finally benefit from the myriad of opportunities that the agreement will create.
The trade agreement includes advanced sustainable development provisions that will foster partnership, help mitigate climate change and bind both sides to effectively implement the Paris Agreement. Unilateral legislative initiatives at EU level, such as upcoming initiative on deforestation and the review of existing rules on timber trade and fight against illegal logging, will enhance this cooperation and effectively ensure that exports to the EU will not contribute to deforestation or soil degradation.
Furthermore, the collaboration includes enforceable commitments on workers’ rights and environmental protection through a dedicated dispute settlement mechanism that includes an active role for civil society organisations and calls on the expertise of international bodies, whose reports and recommendations must be made public. If any of these provisions are not respected, an automatic mechanism will trigger formal government consultations.
In 2019, EU-27 exports in goods to Mercosur accounted for €41.2 billion, whereas export in services reached €21.1 billion in 2019. EU27 headquartered firms invested €114 billion in Mercosur markets since 2010, creating 290,000 jobs in Brazil, Argentina, Uruguay and Paraguay.
Comparatively, in 2019, Mercosur countries exported €35.9 billion in goods to the EU and €10.8 billion in services. Mercosur headquartered firms invested €1.7 billion in the EU27, creating more than 7,000 jobs across the continent since 2010.
The agreement is expected to grow imports from Mercosur by 10.6% and exports to Mercosur by 52.0%, creating jobs and allowing a better flow of goods and services.