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The EU and Mercosur, the South American trading bloc, have brokered a landmark trade deal after 20 years of negotiations, agreeing to slash tariffs on everything from Argentine steaks to German car parts.
Negotiators for both sides announced the deal on Friday, concluding a process that began on June 28 1999, saying it was a signal of hope for a global trading system under strain from the US-China trade war.
Brussels has estimated that the deal would wipe out about €4bn in annual customs duties on EU exports alone, securing preferential access for European goods and services to a region of over 260m people. For Mercosur, some of the greatest prizes include preferential access to EU markets for beef, ethanol and sugar.
Mercosur, an alliance that brings together Brazil, Argentina, Paraguay and Uruguay, and the EU hailed the agreement as proof that co-operation on trade liberalisation can endure even amid current international tensions.
Phil Hogan, the EU’s agriculture commissioner, acknowledged that the EU “had to make significant concessions in order to ensure a balanced, comprehensive and ambitious outcome”.
“The European Commission will be available to help farmers meet these challenges,” he said, including through extra financial support.
Opponents of the deal will have the chance to make their case during what is expected to be a lengthy ratification process, as the agreement will require approval from the bloc’s national parliaments.
Brussels emphasised that the deal will eliminate high customs duties in key sectors for EU companies, including machinery, chemicals and pharmaceuticals.
The deal was struck after three intensive days of negotiations in Brussels that settled the most difficult questions in the talks.
Jorge Faurie, Argentina’s foreign affairs minister, said that the deal proved Mercosur’s desire to increase the openness of its economy to the rest of the world.
Mercosur has been “a very closed economic space”, he said. “This is a very clear message of where we are going.”
Source: Financial Times