EU – Mercosur: Aiming for Agreement in 2024

Steps forward in light of the EU-Mercosur agreement that has been talked about for 25 years. A general arrangement on Free Trade Agreement between the European Union and the bloc of South American countries (Brazil, Argentina, Uruguay, Paraguay, and Bolivia) was reached in 2019, but it has never been finally ratified in these 5 years.

The process now seems to be going through an acceleration phase, with participants looking to conclude the agreement by the end of 2024. This was reported by the Financial Times, with representatives from both parties involved confirming important progress.

There are two critical points: on the one hand, overly strict environmental restrictions by the EU, and on the other hand, the fears of some sectors and countries, especially the agri-food sector and France, because of the influx of cheap products from South America. Currently, only France and Austria are reportedly opposed to the agreement, but that is not enough to stop it.

The European Commission sees a market of 780 million people that could open up thanks to the agreement and savings for European companies of 4 billion euros per year in tariffs. Commission President Ursula von der Leyen, who has just been re-elected, has repeatedly spoken in favor of the agreement and will be in Rio de Janeiro in November for the G-20 summit. The situations will be discussed with Brazilian President Luiz Inácio Lula da Silva.

Of course, opening the market to South American agri-food products will not please European farmers, who are already the protagonists of repeated street demonstrations due to declining profits and Brussels’s overly strict rules. Even an environmental issue, such as the ban Europe would like to see on imports of agri-food products from deforested areas, is not a simple solution. But everyone agrees on recognizing progress.