Brussels: The European Union and Mercosur have signed a groundbreaking Partnership Agreement (EMPA) and an Interim Trade Agreement (iTA), marking a significant milestone in the relationship between the two regions. This agreement is poised to create one of the largest trade zones globally, affecting a market of approximately 700 million consumers and fostering increased economic, diplomatic, and geopolitical collaboration.
According to Cyprus News Agency, the agreement is expected to boost annual exports from the EU to Mercosur by 39%, equating to an estimated value of £49 billion, while supporting numerous jobs within the EU. The agreement serves as a strong geopolitical statement, emphasizing the EU and Mercosur's dedication to multilateralism and a rules-based international order amidst global uncertainties.
The signing ceremony of the EU-Mercosur Partnership Agreement was attended by prominent leaders, including European Commission President Ursula von der Leyen, European Council President Antonio Costa, and representatives from Mercosur countries. EU Trade Commissioner Maroš Šefcovic and his Mercosur counterparts formalized the agreement.
European Commission President Ursula von der Leyen expressed optimism about the partnership, stating it opens new chapters of opportunity for over 700 million citizens. She emphasized that the partnership is mutually beneficial, contributing to economic growth, job creation, and support for clean and digital transitions.
The agreement aims to enhance economic opportunities by eliminating tariffs on EU exports, including agri-food and key industrial products, saving EU businesses £4 billion annually in duties. It also aims to streamline investments in critical supply chains and bolster economic security while supporting digital and green transitions.
For the EU agricultural sector, the agreement provides unprecedented access to the Mercosur market, potentially increasing EU agri-food exports by up to 50%. The deal includes tariff reductions on key EU agri-food products and safeguards for sensitive sectors, including calibrated tariff rate quotas and a £6.3 billion Unity Safety net fund as additional protection for farmers.
Sustainability commitments are a cornerstone of the agreement, featuring enforceable climate action commitments, alignment with the Paris Agreement, and contributions towards climate neutrality by 2050.
Following the signing, both regions will proceed with their respective processes for the agreement's ratification. The EMPA requires ratification by all EU Member States, while the ITA will undergo an EU-only ratification process, necessitating the European Parliament's consent and a concluding decision by the Council.
The iTA is set to expire upon the EMPA's entry into force, signaling a new era of EU-Mercosur relations.