After twenty years of negotiation, the European Union and the Southern Common Market (Mercosur) consisting of Argentina, Brazil, Paraguay, and Uruguay have come to a trade agreement. Both sides have described the event as a “landmark” deal in consolidating a strategic, political, and economic partnership between the two regions and some 800 million people equaling a quarter of global gross domestic product. The deal eliminates tariffs on 93% of exports to the EU with “preferential treatment” for the remaining 7% and increases Mercosur access to the EU market for agricultural goods – notably beef, poultry, sugar, and ethanol. The EU gains a vastly improved export environment, which eliminates Mercosur’s traditionally high tariffs and trade barriers over other parts of the world. Ultimately, the agreement will remove duties on 91% of goods such as car parts, machinery, wine, and cheese that EU companies export to Mercosur countries. The deal represents a win-win for both the EU and Mercosur, creating opportunities for growth and jobs for both sides.
