Written by Gisela Grieger,
On 28 June 2019, the European Union (EU) and the four founding members of Mercosur (the ‘Southern Common Market’) – Argentina, Brazil, Paraguay and Uruguay – reached an ‘agreement in principle’ on a free trade agreement (FTA) as part of a wider association agreement (AA). However, spurred by massive destruction of the Brazilian Amazon through large-scale forest fires, EU policy-makers and international environmental groups alike have since become increasingly vocal in expressing concerns about the deal’s potential environmental and climate change implications. EU farmers’ associations with defensive interests have fiercely criticised what they have referred to as a ‘cars for cows’ deal.
On the other hand, the deal has been warmly welcomed by EU industry associations and several sub-sectors of EU agriculture with offensive interests. If tariff and non-tariff barriers are eliminated or substantially lowered, the potential for growth in bi-regional trade in goods, services and investment is significant. In addition, the FTA would be a strong signal in favour of the rules-based multilateral trading system and against power politics in trade.
After the agreement’s legal review and translation, it will be presented to the Council for signature. It will then be submitted to the European Parliament for consent. Once the Council has adopted the decision concluding the agreement, it will be presented to EU Member State parliaments for ratification.
Read the complete briefing on ‘The trade pillar of the EU-Mercosur Association Agreement‘ on the Think Tank pages of the European Parliament.