European Union approves Mercosur trade agreement after nearly three decades

European Union Ambassadors Approve Largest-Ever Trade Agreement with South American Countries

A provisional agreement has been reached by EU ambassadors to erase tariffs on goods traded between the European Union and four South American countries, Argentina, Brazil, Paraguay, and Uruguay. The agreement, which marks a significant milestone in trade relations, aims to offset losses from US tariffs and reduce reliance on China for critical minerals.

The deal, worth 111 billion euros ($129bn), would remove 4 billion euros ($4.66bn) of duties on EU exports such as car parts, dairy products, and wines. The agreement is expected to expand mutual goods trade between the two blocs, with the EU and Mercosur partners hoping to increase their combined trade by billions of euros.

The European Commission had concluded negotiations on the agreement a year ago and argued that it was essential for unlocking new markets and securing access to critical minerals. Major member states including Germany and Spain have expressed support for the deal.

However, opponents led by France have voiced concerns that the agreement would lead to increased imports of cheap food products, potentially undercutting domestic farmers. Farmers have protested across the EU in recent days, with demonstrations taking place in Poland, Belgium, and France.

The European Parliament will need to approve the accord before it can enter into force. The Commission President Ursula von der Leyen is expected to sign the agreement with Mercosur partners as early as next week.

Source: Al Jazeera