Industry News
EU and Mercosur Reach Political Agreement on Groundbreaking Partnership
The President of the European Commission Ursula von der Leyen and her counterparts from four Mercosur countries (Brazilian President Lula, Argentinian President Milei, Paraguayan President Peña, and Uruguayan President Lacalle Pou) finalized negotiations for a groundbreaking EU-Mercosur partnership agreement.
President of the European Commission, Ursula von der Leyen, said: “This is a win-win agreement, which will bring meaningful benefits to consumers and businesses, on both sides. We are focused on fairness and mutual benefit. We have listened to the concerns of our farmers, and we acted on them. This agreement includes robust safeguards to protect your livelihoods. EU-Mercosur is the biggest agreement ever when it comes to the protection of EU food and drink products. More than 350 EU products now are protected by a geographical indication. In addition, our European health and food standards remain untouchable. Mercosur exporters will have to comply strictly with these standards to access the EU market. This is the reality of an agreement that will save EU companies €4 billion worth of export duties per year.”
The EU and Mercosur• Mercosur was established in 1991 and includes Argentina, Brazil, Paraguay, and Uruguay. • Venezuela, which officially joined in July 2012, was suspended from membership in 2017.• In December 2012, the Protocol of Accession of Bolivia to Mercosur was signed. This protocol is pending ratification by the parliaments of Mercosur countries.• The EU has bilateral Partnership and Cooperation agreements with Argentina, Brazil, Paraguay and Uruguay.• Mercosur countries no longer benefit from the Generalised Scheme of Preferences (GSP) scheme due to their classification as high middle-income countries.
• This agreement comes at a critical time for both sides, presenting opportunities for major mutual gains through strengthened geopolitical, economic, sustainability, and security cooperation.• It will boost strategic trade and political ties between like-minded and reliable partners.• It will support economic growth, boost competitiveness, and strengthen resilience on both sides by opening up trade and investment opportunities and securing sustainable access and processing of raw materials.• It represents a major milestone in fighting climate change with strong, specific, and measurable commitments to stop deforestation.• It considers the interests of all Europeans, including the critically important EU farming sector. It will help increase EU agri-food exports while protecting sensitive sectors.• It upholds the EU's standards on animal health and food safety, preventing unsafe products from entering our market.A boost for EU and Mercosur competitiveness and economic security
This landmark deal will:• Secure and diversify our supply chains.• Create new opportunities for all kinds of businesses, by removing often prohibitive tariffs on EU exports to Mercosur.• Save EU businesses €4 billion worth of duties per year.• Ensure trade preferences in strategic net zero industry sectors such as renewable energy technologies, and low-carbon fuels.• Help small and medium enterprises export more by cutting red tape.• Secure an efficient, reliable, and sustainable flow of raw materials critical for the global green transition.
This landmark deal will:• Secure and diversify our supply chains.• Create new opportunities for all kinds of businesses, by removing often prohibitive tariffs on EU exports to Mercosur.• Save EU businesses €4 billion worth of duties per year.• Ensure trade preferences in strategic net zero industry sectors such as renewable energy technologies, and low-carbon fuels.• Help small and medium enterprises export more by cutting red tape.• Secure an efficient, reliable, and sustainable flow of raw materials critical for the global green transition.
Trade PictureNote: the figures below represent EU’s trade with the four Mercosur countries.• The EU is Mercosur's second-biggest trade in goods partner, after China and ahead of the United States. The EU accounts for 16.9% of Mercosur's total trade in 2023. Mercosur is the EU's tenth-largest trade in goods partner.• In 2023, the EU's exports to the four Mercosur countries amounted to €55.7 billion, while Mercosur's exports to the EU totalled €53.7 billion.• Mercosur's biggest exports to the EU in 2023 were mineral products (29.6% of total exports), foodstuffs, beverages and tobacco (19.2%), and vegetable products (17.9%).• The EU's exports to Mercosur include machinery and appliances (26.7% of total exports), chemicals and pharmaceutical products (25%) and transport equipment (11.9%).• The EU exported €28.2 billion of services to Mercosur, while Mercosur exported €12.3 billion of services to the EU in 2022.• The EU’s accumulated stock of investment has gone up from €130 billion in 2000 to €384.7 billion in 2022.
An enhanced commitment to sustainabilityThis deal takes the EU-Mercosur sustainability commitments to the next level through:• Making the Paris Agreement an essential element of the EU-Mercosur relationship.• Concrete commitments to halt deforestation.• Clear and enforceable commitments on sustainable development, including on labor rights and sustainable management and conservation of forests.• An active role for civil society organizations to overview the implementation of the agreement, including human rights or environmental concerns.
Moreover, €1.8 billion in EU support will facilitate the fair green and digital transition in Mercosur countries, as part of the Global Gateway.
Next stepsThe proposed EU-Mercosur agreement is composed of a political and cooperation pillar and a trade pillar. The end of negotiations constitutes the first step in the process towards the conclusion of the agreement. The official documents will be published online over the next few days.
Following final legal scrubbing by both sides, the text will be translated into all official EU languages and then submitted to the Council and Parliament.
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