It is important to note that this agreement is a significant and unprecedented accomplishment as this is the first time that traditionally closed Mercosur countries open up. The EU is also the first big partner to close a deal with Mercosur therefore giving the EU first mover advantage. Moreover, it is expected to contribute to increased trade along with economic growth as well as being a commitment to the progressive climate, environment and worker’s rights agenda. Mercosur is a big player, it has significant investment stock from Germany, France, Spain and Portugal. This agreement was concluded in June 2019 after 20 years of negotiation, it is a longstanding policy objective between the EU and Latin America.
This agreement provides market access for both industrial and agricultural goods. For instance, in terms of industrial goods the EU will eliminate duties on all industrial goods over 10 years, while Mercosur will remove duties entirely for most products in sectors of key EU interests. Regarding agricultural goods Mercosur will gradually eliminate duties on 93% of tariff lines of agri-food imports and the EU will liberalise 82% of agricultural imports. EU goods imported from Mercosur are comprised prominently of key inputs for EU farmers and industries. The key sectors include soy, iron, copper, coffee and crude oil. EU exports to Mercosur are diversified and high value added products. The key sectors include machinery, car parts, pharma and chemicals. Therefore, the EU-Mercosur trade agreement will eliminate duties in key sectors and thus improve competiveness.
This comprehensive trade agreement is committing Mercosur countries to uphold rigorous food safety standards. It states that all imported foods must comply with EU’s own standards. Furthermore, the EU remains free to regulate with all necessary precautions. Similarly, the implementation of geographical indications (GIs) ensures the protection against misuse, imitation and evocation of EU traditional food and drink products. This will ensure the effective recognition and protection of some 345 EU GIs under the agreement. In terms of customs and trade facilitation this trade agreement ensures the establishment of customs cooperation’s and a regular dialogue on customs matters with Mercosur. Including the mandatory use of risk management systems for more efficient and transparent customs control. Therefore, this trade agreement will fulfil its goal of upholding high standards.
The EU-Mercosur agreement seeks to ensures that trade contributes to sustainable development, making it part of the solution rather than the problem. This is to be achieved through the strengthening of multilateral governance based on multilateral agreements. Promoting sustainability through long term joint engagement with the implementation of a systematic dialogue and cooperation on sensitive issues such as climate change. The key elements include preserving the right to regulate, maintaining protection levels and derogations as well as respecting international labour conventions and multilateral environmental agreements such as the Paris Agreement. To ensure a long standing commitment to sustainable development public authorities and civil societies will be involved in implementation and monitoring. Therefore, it is clear that this agreement is in line with the European Green Deal which has the objective of making Europe the first climate neutral continent by 2050.
To conclude the EU-Mercosur trade agreement can be regarded as a monumental achievement for Europe as well as Latin America. Acting as a catalyst for the materialisation of a greener and stronger Europe in the world. Going forward this agreement will still need to be ratified by all Mercosur and EU member states parliaments. and is expected to come into force in 2021.
Head of Unit C3, Latin America | DG TRADE | European Commission
Matthias Jørgensen is a European Commission Official since 1994. He first worked in DG ENV on issues related to Biodiversity and the Cartagena Biosafety Protocol from 1994-1999. Since 1999 he has worked for DG TRADE, dealing with a variety of bilateral, multilateral and horizontal issues. He was posted as Trade Counsellor to the EU Delegation to Argentina from 2004-2008. He has focussed on Latin America issues since 2010 and is currently Head of Unit in DG TRADE for Trade relations with Latin America. He has been closely involved in the negotiation, conclusion and implementation of agreements with Latin American countries and regional groupings either as Chief negotiator (Chile, Ecuador) or deputy Chief negotiator (Central America, Mercosur, Mexico). He holds a Masters in Law from the University of Copenhagen, a Masters in international Law from the University of Montpellier and a Masters in Law from the College of Europe.