====== Mercosur ======

Since 1999, the EU and Mercosur (comprising Argentina, Brazil, Paraguay, Uruguay, and since 2024, Bolivia) have been negotiating a trade agreement. While an agreement in principle was reached in 2019, EU members refused to ratify the deal.

If approved by the EU member states and the EU parliament, this would create one of the largest free trade zones in the world. The EU and the five Mercosur states together make up 20.2% of global GDP, with the EU contributing the lions share with 17.4% (Brazil: 2.1%, Argentina: 0.6%, Uruguay: 0.1%, Paraguay and Bolivia: 0.04% each).

In terms of population, the trade deal would unite 730 million people (450 million in the EU), or about 8.9% of the global population. While goods trade between the two blocs is still relatively small, totalling €109.4bn in 2023, the EU is Mercosur’s second-largest trade partner for goods, following China and ahead of the United States. Conversely, Mercosur ranks as the EU’s tenth-largest trade partner for goods. When it comes to trade in services, the EU has exported €28.2bn to Mercosur, while Mercosur exported €12.3bn to the EU in 2022. The trade deal is expected to significantly boost goods trade between the two regions.

But here’s the catch, and the reason why the agreement hasn’t been signed in five years – it faces significant opposition. France and Poland, amongst others, are openly opposing the trade deal. Meanwhile 11 countries – Germany, Spain, Portugal, Sweden, Denmark, Finland, Croatia, Estonia, Latvia, Luxembourg, and Czechia – recently called for the swift conclusion of the deal in a letter to the President of the Commission. Germany, for example, sees Mercosur as a key market for its auto exports. Currently, average car tariffs on imports into Brazil, for instance, stand at 35% compared to an import tariff of 10% in the EU.

Food and agri products represent the biggest part of the EU’s imports from Mercosur, with total a total import value of 23 billion euros in 2023 (42% of total imports). The agreement will facilitate trade growth due to a mix of larger import quotas as well as reduced and removed tariffs and duties on products like beef, poultry, sugar and soybeans. That's stirring discontent among EU beef, poultry, sugar beet and soybean farmers, given that their Mercosur counterparts can operate at lower costs.

https://archive.ph/I31hO