EU Countries Approve Mercosur Trade Pact, Setting Up Jan. 17 Signing

Overview

• The Council cleared the deal by qualified majority with 21 in favor, five against and Belgium abstaining, as France, Poland, Austria, Hungary and Ireland opposed while Italy shifted to support after added safeguards.
• Argentina’s foreign minister said the signing will take place on January 17 in Paraguay, with the European Commission authorized to sign though the date has not been formally confirmed by Brussels.
• The agreement would phase out most tariffs, with the EU eliminating duties on about 92% of Mercosur exports within up to a decade and Mercosur cutting tariffs on roughly 91% of EU export value over as long as 15 years, plus quotas for sensitive farm goods such as beef and poultry.
• Safeguard tools let the EU investigate and temporarily suspend preferences for sensitive products if import volumes or prices breach set thresholds, with some triggers narrowed to 5% after negotiations with Italy.
• Entry into force still requires European Parliament approval and ratifications by Brazil, Argentina, Uruguay and Paraguay, with provisional application of certain tariff measures possible during that process.