EU: New trade agreement to open up opportunities for European companies

EU and Mercosur Resume Trade Talks

The European Union and Mercosur will resume talks on an important trade agreement between the two economic blocs, as reported by the Financial Times.
Mercosur is a customs union with free flow of goods and services among 5 South American countries: Brazil, Argentina, Bolivia, Uruguay, and Paraguay.

Mercosur ranks as the fifth largest economic bloc in the world in terms of GDP (PPP).
The European Union holds the third position, following only the United States and China.

A trade deal between Mercosur and the European Union would create a market of 780 million people and save European businesses around $4 billion in tariffs annually.
Brazil and Argentina are among the world’s major exporters of soybeans, coffee, sugar, and other agricultural products.
The EU stands as Brazil’s second-largest trading partner after China.

EU companies have investments of about $330 billion in Mercosur.

The trade agreement has been in the works for 20 years.
French President Emmanuel Macron has openly opposed the agreement stating that low-cost South American imports would harm European farmers.
At the moment, France only has the support of Austria, not enough to halt the negotiations as a relative majority of 27 EU states would suffice for approval.

Macron has also cited environmental concerns to oppose the agreement.
Last year, the European Union passed a bill banning any imports from deforested areas, worrying South American countries that this could harm trade relations.

France shares a border directly with Brazil, the largest economy in Mercosur, in French Guiana.

Resuming Talks

Paraguay’s President Santiago Pena told the Financial Times he does not see “much enthusiasm” from Europeans to continue negotiations.
However, in recent months, EU politicians have been preoccupied by elections and a change in Parliament.
France is also going through a government crisis and has just finished a turbulent electoral cycle.

EU diplomats have said they will travel to Brazil in early September to resume talks.
Some European officials expect an agreement to be signed by the end of the year.

European Commission President Ursula Von Der Leyen will also travel to Rio de Janeiro for the G20 in November.
“Brazil wants to give a sense of continuity to the negotiations,” said Ignacio Bartesaghi, professor of international relations at the Catholic University of Uruguay.

Brazilian President Luiz Ignacio Lula da Silva fears that his Argentine counterpart Javier Milei may withdraw from the agreement, Bartesaghi continued.
So far, however, Buenos Aires has supported the agreement.

Article published on Money.it International Edition on 2024-08-07 19:59:00.
Original title: EU to sign trade deal with South America by year’s end, officials say.