The European Union and South America\u2019s Mercosur trade bloc have struck an agreement on a long-anticipated free trade deal, European Commission President Ursula von der Leyen has announced.<\/p>\n\n\n\n
After negotiations spanning more than 20 years and five years on from an initial deal, von der Leyen and her Mercosur counterparts said a deal had been reached on Friday in Uruguay\u2019s capital, Montevideo.<\/p>\n\n\n\n
\u201cThis is a win-win agreement,\u201d von der Leyen said during a news conference alongside the presidents of the main Mercosur nations, including Argentina and Brazil. \u201cThis agreement is not just an economic opportunity. It is a political necessity,\u201d she added. \u201cI know that strong winds are coming in the opposite direction, towards isolation and fragmentation, but this agreement is our near response.\u201d<\/p>\n\n\n\n
The agreement aims to create one of the largest free trade zones in the world, covering more than 700 million people and nearly 25 percent of global gross domestic product.<\/p>\n\n\n\n
Much like the US-Mexico-Canada free trade agreement, its goal is to reduce tariffs and trade barriers, making it easier for businesses on both sides to export goods.<\/p>\n\n\n\n
Mercosur comprises Brazil \u2013 which makes up the lion\u2019s share of the bloc\u2019s territory, economic output and population \u2013 along with Argentina, Paraguay, Uruguay and Bolivia, the newest member. <\/p>\n\n\n\n
While South American leaders hailed the pact, the deal is not done for some of the European countries. France has led a group of EU member states that still have objections to the pact with the country\u2019s minister for trade, Sophie Primas, saying von der Leyen\u2019s announcement on Friday \u201cregards only her\u201d.<\/p>\n\n\n\n
\u201cToday is not the end of the story,\u201d Primas told the AFP news agency in a statement. \u201cThis only commits the commission, not the [EU] member states.\u201d The trade agreement requires approval from 15 of the 27 EU members representing 65 percent of the EU population along with a simple majority in the European Parliament.<\/p>\n\n\n\n
The European farmers lobby Copa-Coge reiterated its opposition to the deal and called for protests in Brussels on Monday. The farmers have argued that Mercosur products do not meet EU standards and would create unfair competition.<\/p>\n\n\n\n
In remarks aimed at her \u201cfellow Europeans\u201d \u2013 and perhaps those more sceptical, such as the farmers \u2013 von der Leyen said the pact would have a positive impact on about 60,000 companies that export to the Mercosur region.<\/p>\n\n\n\n
She said they will \u201cbenefit from reduced tariffs, simpler customs procedures and preferential access to some critical raw materials\u201d as the agreement \u201cwill create huge business opportunities\u201d.<\/p>\n\n\n\n
\u201cTo our farmers,\u201d she said, \u201cwe have heard you, listened to your concerns, and we are acting on them. This agreement includes robust safeguards to protect your livelihoods.\u201d<\/p>\n\n\n\n
Italy said on Thursday that there were no conditions for signing off on a deal while Poland said last week it opposed the free trade deal in its current form.<\/p>\n\n\n\n
European environmental groups also broadly oppose the accord. Friends of the Earth called it a \u201cclimate-wrecking\u201d deal.<\/p>\n\n\n\n
Meanwhile, German Chancellor Olaf Scholz hailed the conclusion of the deal. \u201cAfter more than 20 years of negotiations, the Mercosur countries and the EU have reached a political agreement,\u201d he said in a social media post.<\/p>\n\n\n\n
\u201cAn important hurdle for the agreement has been overcome. This will create a free market for more than 700 million people along with more growth and competitiveness.\u201d<\/p>\n\n\n\n
Germany\u2019s trade and industry associations also welcomed the move. \u201cSuch important agreements must not take 25 years,\u201d BGA trade lobby President Dirk Jandura said in a statement, adding that it was now up to the German government to ensure there is a majority for the \u201cmilestone\u201d agreement.<\/p>\n\n\n\n
The head of Germany\u2019s BDI industry lobby group, Siegfried Russwurm, said the announcement was very good news for German and European companies as well as for their economies.<\/p>\n\n\n\n
\u201cIn times of increasing fragmentation of global trade, the trade agreement sends a clear and strategic signal for free and rules-based trade,\u201d Russwurm said in a statement.<\/p>\n\n\n\n
Spain also maintains that the deal is vital for the bloc as it looks to diversify its trade after the near-closure of the Russian market during the war in Ukraine and discomfort about a reliance on China.<\/p>\n\n\n\n
Spain and Germany view Mercosur as a market for EU cars, machinery and chemicals and a potentially reliable source of critical minerals, such as lithium, which is used in batteries and is required for Europe\u2019s green transition.<\/p>\n\n\n\n
They also pointed to agricultural benefits, given the deal offers greater access and lower tariffs for EU cheeses, ham and wine.<\/p>\n","protected":false},"excerpt":{"rendered":"
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