The agreement between Mercosur and the European Union (EU) is a historic milestone in the world of trade. Both blocs represent a market of 780 million people and a combined GDP of around $20 trillion, making it the largest trade deal ever signed.
Mercosur, which stands for the Southern Common Market, is a regional economic bloc made up of Argentina, Brazil, Paraguay, Uruguay, and Venezuela (although Venezuela`s membership has been suspended since 2016 due to internal political turmoil). The European Union, on the other hand, is an economic and political union made up of 27 countries in Europe.
The negotiations for this agreement began in 1999, but it wasn`t until June 28, 2019, that the deal was finally signed. The agreement covers a wide range of areas, including trade in goods and services, government procurement, intellectual property, and sustainable development.
One of the main benefits of this agreement is the elimination of tariffs on a significant number of products. In fact, Mercosur will eliminate tariffs on 91% of products imported from the EU. The EU, in turn, will eliminate tariffs on 92% of products imported from Mercosur. This will make it easier and cheaper for companies to trade between both blocs, leading to increased competitiveness and economic growth.
The agreement also includes provisions for the protection of geographical indications (GIs). This means that products with a specific geographical origin, such as Parmigiano Reggiano cheese or Bordeaux wine, will be protected from imitation and misuse. This is a crucial aspect for producers who rely on the reputation of their products to maintain their market share.
Moreover, the agreement encourages sustainable development. Both blocs commit to upholding environmental and labor standards, as well as promoting sustainable management of natural resources. This includes the protection of forests, the promotion of renewable energy sources, and the conservation of biodiversity.
However, the agreement has received criticism from various sectors, including environmentalists and farmers. Environmentalists are concerned that the deal could lead to increased deforestation in the Amazon rainforest, as Brazil is one of the largest producers of beef and soybeans in the world. Farmers, on the other hand, are worried about the impact of increased competition on their livelihoods.
In conclusion, the agreement between Mercosur and the European Union is a significant step towards global trade liberalization. The elimination of tariffs, the protection of GIs, and the promotion of sustainable development are positive aspects that will benefit both consumers and producers. However, it is essential to ensure that the deal is implemented in a way that does not harm the environment or small-scale farmers.