EU Trade Deal with Mercosur Bloc Takes Provisional Effect in South America

EU and Mercosur Bloc Sign Long-Awaited Trade Deal

A trade deal between the European Union and South America’s Mercosur bloc has taken effect, creating a large free trade area with significant potential for business growth. The agreement, which was signed in January after 25 years of negotiations, aims to lower tariffs and boost trade between the two regions.

The pact establishes one of the world’s largest free trade areas, covering approximately 720 million consumers and valued at an estimated $22 trillion. The deal will eliminate tariffs on more than 90% of bilateral trade between the EU and Mercosur countries.

Key provisions of the agreement include favorable treatment for European exports of cars, wine, and cheese, while making it easier for South American beef, poultry, sugar, rice, honey, and soya beans to reach Europe. The deal also aims to provide valuable new export opportunities for farmers in both regions.

The European Commission has provisionally enacted the deal, but it is currently being challenged by the EU’s judiciary. If the court rules against the agreement, it will be halted. The EU leader, Ursula von der Leyen, and leaders of Mercosur nations Brazil, Argentina, Uruguay, and Paraguay are expected to hold a videoconference on Friday to celebrate the agreement.

Brazil’s President Luiz Inacio Lula da Silva has validated the deal in his country, citing it as a response to unilateral tariffs imposed by US President Donald Trump. The new trade deal has faced opposition from farmers and environmental groups, who have expressed concerns over the potential impact of inexpensive South American imports and increased deforestation.

The agreement is expected to be celebrated by EU businesses, consumers, and farmers, who will gain valuable new export opportunities with full protection for sensitive sectors.

Source: Al Jazeera