The European Union (EU) has finalized a trade deal with Mercosur, a bloc consisting of Argentina, Brazil, Paraguay, and Uruguay. European Commission President Ursula von der Leyen hailed it as a "historic milestone" in today’s volatile global economy.
If ratified, the agreement will lower tariffs, streamline customs processes, and enhance EU access to raw materials. This could boost trade between the two regions, which currently accounts for nearly € 113 billion annually. EU exports, including cars, machinery, and pharmaceuticals, are expected to rise, while South American exports of minerals like lithium and nickel, as well as agricultural products, will gain smoother entry into European markets. The deal would reduce prices for consumers.
The Mercosur-EU trade bloc encompasses nearly 800 million consumers and 20% of global GDP. EU officials estimate that 60,000 European companies already export to Mercosur, half of which are small businesses. For Germany, facing economic headwinds, the agreement offers an opportunity to reinvigorate its export sector.
However, ratification faces hurdles. France, Italy, and Poland have expressed concerns about environmental protections and fair competition for European farmers. French trade minister Sophie Primas underscored her country’s resistance, emphasizing the need for stricter safeguards to protect local industries and uphold European standards.
After the agreement is translated into all EU member state languages, it will go to the European Council for ratification, where EU countries are represented by their trade ministers. If the agreement is not blocked, it then must be ratified by the European Parliament.