The European Commission has only recently wrapped up a political agreement with the Mercosur countries — Argentina, Brazil, Paraguay and Uruguay. This pact seeks to establish the world’s biggest free trade zone. This ambitious new agreement hopes to engage about 750 million people. This will be more than one-fifth of the entire global economy. However, the deal is facing intense pushback from EU member states, led by France. They are worried about being put at an unfair disadvantage by agricultural imports from Mercosur and the lower environmental standards in those countries.
Brazil continues to maintain high hopes for the passage of the EU-Mercosur trade agreement. Brazil’s trade envoy, Jorge Vian, highlighted that the current tariff situation with the United States might facilitate the agreement’s approval. He underscored the serious potential effects of US tariffs. Such tariffs would be deeply damaging for European agricultural producers, industrial producers and manufacturing j.
Vian stated, “Europe exports more than 600 billion dollars’ [worth of goods] to the US. If these exports suffer tariffs of around 20%, it will affect the life of agricultural producers, industrial producers and manufacturing sectors in Europe.” Such a fate would likely accelerate the calls among EU member states to reconsider their stance on the ratification of the EU-Mercosur deal.
The different production conditions between Brazil and Europe, from pesticide use to animal welfare, has been a major point of contention in the talks. Vian stressed that “in Brazil, you have a tropical-based production while in Europe it is a temperate-based production. These climatic structures are very different.” This is a major distinction and an area where the two regions can’t just copy each other’s production methods.
Brazil aims to use this trade deal to sell more critical raw materials and renewable energy to Europe. Vian remarked on the necessity for dialogue and cooperation, asserting, “it can be solved with dialogue and cooperation.” He was aware of China’s increasing foothold in the international market. He stressed the point that Europe remained number one on the list of Brazil’s priorities.
The nature of global trade is quickly changing. Even with mounting challenges such as tariffs and intra-EU resistance, Brazil is still hopeful that the EU-Mercosur trade deal will come to fruition. Vian noted, “What we have now is an objective situation: the Trump administration is damaging free trade and multilateralism. There’s a need to adjust for everybody.”
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