After a negotiation marathon lasting a quarter of a century, representatives from the European Union and the Mercosur countries – Brazil, Argentina, Uruguay, and Paraguay – signed the joint free trade agreement on Friday. The ceremony marks the formal completion of a project that creates a free trade zone for about 780 million people. The goal of the agreement is the extensive reduction of tariffs and trade barriers to intensify the exchange of industrial goods from Europe and agricultural products from South America.
The European Commission emphasized the strategic importance of the pact, which is intended to reduce dependence on single markets like China and secure access to critical raw materials. In return, the Mercosur countries gain easier market access for beef, poultry, and sugar. Especially the German automotive industry and mechanical engineering expect significant growth impulses from the elimination of high import tariffs in South America.
Despite the signing, the agreement remains controversial. European agricultural associations, particularly in France and Austria, fear unfair competition from cheaper imported goods that would not have to meet strict EU environmental and social standards. Environmental organizations also criticize possible impacts on the rainforest. The agreement must now still be ratified by the national parliaments as well as the European Parliament, with considerable resistance expected in some member states.
