Trade Agreement Between Eu And Mercosur

The pact between the European Union and the South American free trade bloc Mercosur – made up of Brazil, Argentina, Paraguay and Uruguay – was agreed in principle last year after two decades of struggle. The EU is Mercosur`s trading and investment partner. EU exports to Mercosur amounted to EUR 41 billion in 2019 and EUR 21 billion in the services sector in 2018. Argentina, facing serious economic problems, has chosen in recent years to intensify its relations with China and Brazil has just signed new trade facilitation agreements with the United States, while continuing to allocate one third of its exports to the Chinese market. At a time when protectionist pressure is intensifying, a trade agreement between the EU and Mercosur sends a clear signal to the world that two of its largest economies are the most important: on the one hand, negotiating agreements with third countries is the responsibility of the European Commission (without which there could be no common market); and the tactical necessity of the negotiation process, which requires secrecy, makes it an opaque field of action. The Commission has taken the initiative, it is aware of the « red lines » of the Member States, but the negotiation process is far removed from civil society and parliaments. Moreover, a trade agreement, like many international agreements, resembles a Calder motif: each clause, percentage or quota is added to the agreement in exchange for a concession to other clauses that have themselves been previously negotiated in compensation for a concession, etc. As soon as the balance has been laborious, a modification of one of these clauses would therefore involve a renegotiation of the whole; In the case of Mercosur, it is also necessary to adopt a unanimous agreement on the issue, which will probably be submitted in October next year. The agreement will make it easier for EU companies to sell their services to Mercosur, both locally and across borders. « The overall change seems to be very clear: either an agreement is reached between the POWERS of the EU and the United States to allow other actors to participate, or we develop other alternatives, as proposed by Von China, » Paikin said.