{"id":7249,"date":"2025-04-11T10:21:36","date_gmt":"2025-04-11T08:21:36","guid":{"rendered":"https:\/\/nicola-bernard.de\/?p=7249"},"modified":"2025-04-11T10:21:36","modified_gmt":"2025-04-11T08:21:36","slug":"eu-mercosur-the-economic-potential-of-the-free-trade-agreement","status":"publish","type":"post","link":"https:\/\/nicola-bernard.de\/en\/eu-mercosur-the-economic-potential-of-the-free-trade-agreement\/","title":{"rendered":"EU\u2013Mercosur: The Economic Potential of the Free Trade Agreement"},"content":{"rendered":"

Mercosur<\/strong>, also known as the “Southern Common Market”, is the most significant economic and trade alliance in South America. It was established on 26 March 1991<\/strong> with the aim of enabling the free movement of goods, services and people<\/strong> among its member states.<\/p>\n

Headquartered in Montevideo, Uruguay<\/strong>, the bloc comprises the four founding members Brazil, Argentina, Paraguay and Uruguay<\/strong>. As of July 2024<\/strong>, Bolivia<\/strong> has also become an official member \u2013 however, the newly concluded agreement between the EU and Mercosur<\/strong> will not yet apply to Bolivia.<\/p>\n

\u00a0<\/strong><\/p>\n

A New Milestone in Transatlantic Trade<\/strong><\/h5>\n

On 6 December 2024<\/strong>, the political agreement on a free trade deal between the EU and Mercosur<\/strong> was officially announced at the Mercosur summit in Montevideo \u2013 marking the end of over 25 years of negotiations<\/strong>. The agreement will establish one of the largest free trade areas in the world<\/strong>, encompassing a market of roughly 718 million people<\/strong> and nearly 25% of global GDP<\/strong>.<\/p>\n

Its primary objective is to deepen economic ties<\/strong> between the two regions by reducing trade barriers. Beyond tariff liberalisation, the agreement also includes future provisions relating to intellectual property protection<\/strong>, the harmonisation of environmental and health standards<\/strong>, and public procurement regulations<\/strong>.<\/p>\n

\u00a0<\/strong><\/p>\n

Relevance for Export-Oriented Businesses<\/strong><\/h5>\n

The agreement offers substantial advantages for businesses<\/strong>. It introduces a new legal framework<\/strong> that simplifies procedures, lowers costs, and facilitates market access for goods and services across both regions. This is particularly relevant for sectors such as infrastructure, technology and services<\/strong>. Companies will benefit from improved access to public tenders<\/strong> in the participating countries.<\/p>\n

In addition, mechanisms to safeguard intellectual property<\/strong> \u2013 such as patents and trademarks \u2013 will be strengthened. Another key element is the establishment of clear dispute settlement procedures<\/strong>, designed to increase legal certainty<\/strong> and provide more reliable solutions in the event of trade conflicts between companies or governments.<\/p>\n

\u00a0<\/strong><\/p>\n

Relief Through Tariff Elimination<\/strong><\/h5>\n

A key lever of the agreement lies in the removal of tariffs<\/strong>, which is expected to provide significant relief for EU exporters<\/strong>. Currently, Mercosur imposes some of the world\u2019s highest import duties<\/strong> \u2013 for example, 35% on cars<\/strong>, 14 to 20% on machinery<\/strong>, and up to 18% on chemicals<\/strong>. The agreement is expected to abolish around 90% of these tariffs<\/strong>, which could save European businesses around 4 billion euros annually<\/strong> \u2013 a welcome development amid ongoing global trade tensions.<\/p>\n

\u00a0<\/strong><\/p>\n

Implementation Still Underway<\/strong><\/h5>\n

The agreement has not yet entered into force. Several procedural steps remain, including legal verification<\/strong> of the text and its translation into all official languages<\/strong> of the member states. This will be followed by the ratification processes<\/strong> within the national and supranational institutions of both the EU and Mercosur<\/strong>. At present, there is no definitive timeline for implementation. However, Germany and Brazil<\/strong> have already spoken out in favour of a rapid ratification<\/strong>.<\/p>\n

Sources: GTAI<\/a> (in German), DIHK<\/a> (in German)<\/p>\n","protected":false},"excerpt":{"rendered":"

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