one of the largest trade agreements signed between blocs<\/strong> at a time when protectionist practices are increasingly common.<\/p>\nThe strategic partnership between Mercosur and the EU involves integrating a 773 million-person market accounting for almost a quarter of the world’s gross domestic product (GDP)<\/strong> with more than $100 billion (88 billion euros) in bilateral trade of goods and services. The document signed between the two trade blocs foresees that more than 90% of each bloc\u2019s exports will receive tariff benefits<\/strong> within a maximum period of 10 years.<\/p>\nIn this special report from IDEAS LLYC, we share some information fundamental to understanding the agreement\u2019s relevance<\/strong>, as well as offer a local perspective on what it means for both the European Union and key Mercosur parties Argentina and Brazil.<\/p>\n[\/et_pb_text][et_pb_text admin_label=”El tratado desde la perspectiva argentina” _builder_version=”3.1.1″]<\/p>\n
The treaty from the Argentine perspective<\/h1>\n
[\/et_pb_text][et_pb_text _builder_version=”3.1.1″]<\/p>\n
The impact of this agreement\u2019s implementation will be considerable for Argentina. Until last June 28th, Mercosur\u2014and particularly Brazil\u2014were the country\u2019s main trading partners<\/strong>, accumulating, in general, trade agreements worth barely 9 percent of world GDP. As a result of these events, this figure has jumped to 30 percent, implying huge progress for the country\u2019s commercial integration.<\/p>\nLikewise, a quantum leap in the country’s competitiveness will be essential. This could mean, for example, lowering logistics costs; improving port, road, rail and telecommunications infrastructure; or modernizing regulatory frameworks.<\/strong><\/p>\n[\/et_pb_text][et_pb_text admin_label=”Enumeraci\u00f3n” _builder_version=”3.1.1″ background_color=”#e6eef4″ custom_padding=”30px|30px|30px|30px”]<\/p>\n
\n- 63 percent<\/strong> of Argentine exports to the EU are agricultural goods.<\/strong><\/li>\n
- 92 percent<\/strong> of the companies that export manufactures in Argentina are micro, small or medium exporters.<\/strong><\/li>\n
- Argentina is only involved in 2 percent of the EU\u2019s FDI.<\/strong><\/li>\n
- The European Union is a strategic partner<\/strong> for Argentina from the historical, cultural, geopolitical and commercial points of view. Currently, it is the country\u2019s second-largest export destination<\/strong>, accounting for more than $9 billion in 2018.<\/li>\n
- Today, trade with the EU accounts for 15 percent of Argentina’s annual foreign trade<\/strong>.<\/li>\n
- The EU countries that sell most to Argentina are Germany (accounting for 30.8 percent of EU imports), Italy, Spain, France and the United Kingdom.<\/li>\n<\/ul>\n
[\/et_pb_text][et_pb_text admin_label=”THE TREATY FROM THE BRAZILIAN PERSPECTIVE” _builder_version=”3.1.1″]<\/p>\n
The treaty from the Brazilian perspective<\/h1>\n
[\/et_pb_text][et_pb_text _builder_version=”3.1.1″]As a consequence of the new EU-Mercosur trade agreement, Brazil’s GDP will increase by $87.5 billion over the next 15 years<\/strong>\u2014though this figure may reach as high as $125 billion according to estimates from the Ministry of Economy. In 10 years, Brazil could create 778,400 jobs<\/strong> and increase Brazilian exports to the European bloc by 23.6 percent, representing $9.9 billion in Brazilian sales to the EU.<\/p>\nAlthough the industry considers the agreement positive, the agricultural sector should experience the most benefits in the short-term.<\/strong>
\n[\/et_pb_text][et_pb_text admin_label=”Enumeraci\u00f3n” _builder_version=”3.1.1″ background_color=”#e6eef4″ custom_padding=”30px|30px|30px|30px”]<\/p>\n\n- 90 percent of Mercosur\u2019s exports to the EU will not pay tariffs<\/strong> for a period of up to 10 years. Today, only 24 percent of what Brazil sells to Europeans has this privilege.<\/li>\n
- Tariffs on many agricultural products<\/strong> will be eliminated once the agreement enters into effect.<\/li>\n
- Export tariffs will be eliminated on all Brazilian industrial products.<\/strong><\/li>\n
- There will be a guaranteed barrier<\/strong> on use of the name \u201ccacha\u00e7a\u201d for similar liquors produced outside Brazil, as well as in the names of certain types of cheese.<\/li>\n
- Expected GDP increase of $87.5 billion<\/strong> over 15 years.<\/li>\n
- 6 percent increase in Brazilian exports<\/strong> to the European bloc in 10 years, with the potential to create 778,400 jobs.<\/li>\n
- Increased export competitiveness and growth<\/strong> in sales to EU countries.<\/li>\n<\/ul>\n
[\/et_pb_text][et_pb_text admin_label=”THE TREATY FROM THE EUROPEAN PERSPECTIVE” _builder_version=”3.1.1″]<\/p>\n
The treaty from the European perspective<\/h1>\n
[\/et_pb_text][et_pb_text _builder_version=”3.1.1″]The main pillar on which the EU builds these treaties is job creation through trade promotion.<\/strong> As evidence of its importance, the European Commission explains that European exports to Brazil maintain 855,000 jobs in the Union and 436,000 in Brazil. In addition, every year, European companies will save 4 billion euros in customs duties to Mercosur markets.<\/p>\nAfter the positive words following the signing, the remaining challenge for all member states lies in ratifying the agreement.<\/strong> The EU\u2019s complex decision-making process can take up to two years. France and Ireland have already expressed their doubts about ratifying it until they are convinced it will not adversely affect their agriculture sectors. Spain and Germany,<\/strong> the main automobile exporters (together with the United Kingdom), have been the main drivers behind the negotiations, since they will benefit from opening Mercosur\u2019s markets<\/strong>, which have traditionally been closed to these exports.<\/p>\nIn the explanation of the agreement, the European Commission highlighted the following:
\n[\/et_pb_text][et_pb_text admin_label=”Enumeraci\u00f3n” _builder_version=”3.1.1″ background_color=”#e6eef4″ custom_padding=”30px|30px|30px|30px”]<\/p>\n
\n- Reduced tariffs on European products<\/strong> that have traditionally had problems accessing Mercosur markets. The main ones are automobiles and spare parts, machinery, chemical and pharmaceutical products, as well as textiles and footwear.<\/li>\n
- Eased customs procedures.<\/strong> Both blocs will simplify customs procedures, as well as review technical and standardization regulations to prevent regulatory divergences from blocking product entry.<\/li>\n
- Export of services<\/strong>. The service sector is one of the EU\u2019s main exporting areas. Now, European companies will have fewer barriers to accessing services such as telecommunications, finance, business and transport.<\/li>\n
- Access to public contracts,<\/strong> from which European companies were excluded. According to the agreement, they can now compete on equal terms with Mercosur companies.<\/li>\n
- Guarantee that European food safety standards<\/strong> will not be adapted to promote the entry of Mercosur products under any circumstances; this was one of the points that created the most controversy throughout the negotiations.<\/li>\n
- Environmental and labor sustainability<\/strong>. The European Commission emphasized that trade between both blocs must uphold the Paris Agreement<\/a> on climate change and workers\u2019 rights.<\/li>\n
- As usual in EU trade agreements, cultural and creative industries are excluded<\/strong>, and their protection is enhanced by national legislations.<\/li>\n
- Advantages for SMEs<\/strong>, which would be provided with a specific platform to offer clear information on the entry requirements for these markets.<\/li>\n
- Tariff reductions on agricultural products<\/strong>, specifically dairy products, confectionery, spirits and wines. Additionally, the agreement guarantees the protection of the 357 European designations of origin.<\/li>\n<\/ol>\n
[\/et_pb_text][et_pb_video src=”https:\/\/www.youtube.com\/watch?v=jxt1zelR8ls” _builder_version=”3.1.1″][\/et_pb_video][et_pb_text _builder_version=”3.1.1″]<\/p>\n
Vivaldo De Sousa, Public Affairs Manager at LLYC Brazil, and Facundo Gonzalez Sembla, Junior Public Affairs Consultant at LLYC Argentina, participated in the preparation of this report.<\/em><\/h3>\n[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"
[et_pb_section fb_built=”1″ _builder_version=”3.0.47″][et_pb_row _builder_version=”3.0.47″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.0.47″ parallax=”off” parallax_method=”on”][et_pb_text admin_label=”Intro” _builder_version=”3.1.1″] Last June 28th, the Strategic Association Agreement between the Southern Common Market (Mercosur) and the European Union (EU) was signed, coinciding with the end of the G20 Summit, held in Osaka, Japan. This is one of the largest trade agreements signed between […]<\/p>\n","protected":false},"author":4,"featured_media":57321,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[86],"class_list":["post-57316","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ideas"],"acf":[],"yoast_head":"\n
Effects of the Mercosur-European Union Agreement - LLYC<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/llyc.global\/en\/ideas\/effects-of-the-mercosur-european-union-agreement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Effects of the Mercosur-European Union Agreement\" \/>\n<meta property=\"og:description\" content=\"[et_pb_section fb_built=”1″ _builder_version=”3.0.47″][et_pb_row _builder_version=”3.0.47″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.0.47″ parallax=”off” parallax_method=”on”][et_pb_text admin_label=”Intro” _builder_version=”3.1.1″] Last June 28th, the Strategic Association Agreement between the Southern Common Market (Mercosur) and the European Union (EU) was signed, coinciding with the end of the G20 Summit, held in Osaka, Japan. 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This is one of the largest trade agreements signed between […]","og_url":"https:\/\/llyc.global\/en\/ideas\/effects-of-the-mercosur-european-union-agreement\/","og_site_name":"LLYC","article_publisher":"https:\/\/www.facebook.com\/LLYC.Global\/","article_published_time":"2019-07-08T22:00:00+00:00","og_image":[{"width":350,"height":193,"url":"https:\/\/llyc.global\/wp-content\/uploads\/2023\/10\/Miniatura_Mercosur-1.png","type":"image\/png"}],"author":"maguilar","twitter_card":"summary_large_image","twitter_creator":"@llorenteycuenca","twitter_site":"@llorenteycuenca","twitter_misc":{"Written by":"maguilar","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/llyc.global\/en\/ideas\/effects-of-the-mercosur-european-union-agreement\/","url":"https:\/\/llyc.global\/en\/ideas\/effects-of-the-mercosur-european-union-agreement\/","name":"Effects of the Mercosur-European Union Agreement - LLYC","isPartOf":{"@id":"https:\/\/llyc.global\/en\/#website"},"primaryImageOfPage":{"@id":"https:\/\/llyc.global\/en\/ideas\/effects-of-the-mercosur-european-union-agreement\/#primaryimage"},"image":{"@id":"https:\/\/llyc.global\/en\/ideas\/effects-of-the-mercosur-european-union-agreement\/#primaryimage"},"thumbnailUrl":"https:\/\/llyc.global\/wp-content\/uploads\/2023\/10\/Miniatura_Mercosur-1.png","datePublished":"2019-07-08T22:00:00+00:00","author":{"@id":"https:\/\/llyc.global\/en\/#\/schema\/person\/8187160eba73b996b064cce622bd4541"},"breadcrumb":{"@id":"https:\/\/llyc.global\/en\/ideas\/effects-of-the-mercosur-european-union-agreement\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/llyc.global\/en\/ideas\/effects-of-the-mercosur-european-union-agreement\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/llyc.global\/en\/ideas\/effects-of-the-mercosur-european-union-agreement\/#primaryimage","url":"https:\/\/llyc.global\/wp-content\/uploads\/2023\/10\/Miniatura_Mercosur-1.png","contentUrl":"https:\/\/llyc.global\/wp-content\/uploads\/2023\/10\/Miniatura_Mercosur-1.png","width":350,"height":193},{"@type":"BreadcrumbList","@id":"https:\/\/llyc.global\/en\/ideas\/effects-of-the-mercosur-european-union-agreement\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/llyc.global\/en\/"},{"@type":"ListItem","position":2,"name":"Effects of the Mercosur-European Union Agreement"}]},{"@type":"WebSite","@id":"https:\/\/llyc.global\/en\/#website","url":"https:\/\/llyc.global\/en\/","name":"LLYC","description":"Consultoria de comunicaci\u00f3n marketing y asuntos p\u00fablicos","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/llyc.global\/en\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/llyc.global\/en\/#\/schema\/person\/8187160eba73b996b064cce622bd4541","name":"maguilar","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/llyc.global\/en\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/2567cb4cb8cda24204d7f7cde2c10fbd?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/2567cb4cb8cda24204d7f7cde2c10fbd?s=96&d=mm&r=g","caption":"maguilar"}}]}},"_links":{"self":[{"href":"https:\/\/llyc.global\/en\/wp-json\/wp\/v2\/posts\/57316","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/llyc.global\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/llyc.global\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/llyc.global\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/llyc.global\/en\/wp-json\/wp\/v2\/comments?post=57316"}],"version-history":[{"count":0,"href":"https:\/\/llyc.global\/en\/wp-json\/wp\/v2\/posts\/57316\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/llyc.global\/en\/wp-json\/wp\/v2\/media\/57321"}],"wp:attachment":[{"href":"https:\/\/llyc.global\/en\/wp-json\/wp\/v2\/media?parent=57316"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/llyc.global\/en\/wp-json\/wp\/v2\/categories?post=57316"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}