EU and Mercosur Sign Sweeping Trade and Partnership Deal

Overview

• Representatives of both blocs signed the pact on 17 January in Asunción, with Brazil represented by Foreign Minister Mauro Vieira as President Luiz Inácio Lula da Silva did not attend.
• The agreement would create a preferential market of roughly 720 million people and more than US$22 trillion in combined GDP.
• Tariffs will be eliminated on over 90% of bilateral trade on schedules up to 12 years for EU cuts and up to 15 years for Mercosur cuts, with quotas and temporary safeguards for sensitive agricultural products and unchanged EU sanitary standards.
• Binding environmental provisions bar benefits for products linked to illegal deforestation and allow suspension for breaches of Paris Agreement commitments.
• The text now goes to the European Parliament and Mercosur national legislatures for approval, with possible provisional application of commercial chapters and ongoing resistance from European farmers including protests in France, Poland, Ireland and Belgium.