Another threat to the successful implementation of the agreement comes from Brazil, and in particular from President Jair Bolsonaro. Among the concessions, the EU has managed to put pressure on Mercosur on the commitment to respect the Paris climate agreement. Nevertheless, Bolsonaro has pledged to move from the agreement to Trump`s example. The quantifiable benefits of the free trade agreement between the European Union and Mercosur – Argentina, Brazil, Paraguay and Uruguay – are small due to the low share of EU trade with Mercosur and the relatively modest ambitions of the agreement to liberalise Mercosur`s agriculture and manufacturing industry. This agreement represents a win-win situation for both the EU and Mercosur and creates opportunities for growth, employment and sustainable development on both sides. On the old continent, the agreement met fierce opposition from the agricultural sector and the powerful agricultural lobby Copa-Cogeca. European farmers fear that foreign producers will flood the domestic market with cheap prices for sugar and meat. Find out how the EU-Mercosur trade agreement would help small businesses that are already exporting around the world. Reactions were proportionately enthusiastic on the other side of the Atlantic. Jair Bolsonaro and Mauricio Macri, President of Brazil and Argentina, hailed the agreement as a historic breakthrough for Mercosur. Discover the current trade relationship between the EU and Mercosur In an era troubled by growing protectionist sentiment, victory is both economic and symbolic for Brussels.
It is essential that the agreement indicates that the bloc is capable and willing to pursue its independent free trade agenda. It helps to confirm the EU as a bulwark of the open and rules-based global economy. Jean-Claude Juncker, outgoing President of the European Commission, tweeted hours after the announcement: it was precisely the fear of a peonist return that motivated EU and Mercosur officials to speed up negotiations and negotiate a provisional agreement. But their goodwill could prove to be conceited. From Brazil to France, other formidable opponents oppose the agreement. Apart from the solemn tweets, the future agreement BETWEEN the EU and Mercosur could hardly be more uncertain. “In the midst of international trade tensions, we are sending a strong signal today, together with our Mercosur partners, that we are defending rules-based trade.” Nevertheless, if ratified and accompanied by reforms that enhance competitiveness, the agreement could be an important departure for Mercosur and push it to an external development strategy. The agreement could also represent an important step forward for the EU in its efforts to reform agriculture. The agreement is facing a difficult ratification process, but one worth fighting for and fighting for. The inclusion of mechanisms to combat the environment, particularly deforestation, will be particularly important.
The agreement is an insurance policy against a further deterioration of the rules-based multilateral trading system.
