ASUNCIÓN, Paraguay (AP) — The European Union and Mercosur, a South American trading bloc, recently signed a significant free trade agreement after over 25 years of negotiations. This deal aims to strengthen economic ties amid rising global protectionism.
The ceremony took place in Asunción, Paraguay, marking a big win for the EU as it works to boost its presence in a resource-rich region that faces increasing competition from China and the U.S. Many see this agreement as a response to recent global trade tensions, especially under the former U.S. administration’s policies.
Mercosur comprises South America’s largest economies: Argentina and Brazil, along with Paraguay and Uruguay. Bolivia may join soon, while Venezuela is currently suspended from the bloc.
This agreement will eliminate over 90% of tariffs, creating one of the world’s largest free trade zones. It promises to make products cheaper for over 700 million consumers.
European Commission President Ursula von der Leyen hailed the deal as a stand against unfair trade practices, emphasizing the focus on fair trade. “We choose productive partnerships over isolation,” she stated. This was seen as a subtle criticism of the past U.S. administration’s aggressive trade moves.
Brazilian President Luiz Inácio Lula da Silva, a long-time supporter of this deal, viewed it as a symbol of global cooperation, especially critical in a time of rising unilateralism. However, he skipped the signing ceremony, indicating simmering tensions between the trading partners.
Concerns from European farmers played a significant role in delaying the agreement. They feared being overwhelmed by cheaper South American imports. The EU pushed for strict standards on agriculture, making it harder for some countries to accept the deal. As Agathe Demarais from the European Council on Foreign Relations noted, many developing nations find the EU’s demands patronizing.
To appease farmers, the EU has promised subsidies and set specific quotas on products like beef and sugar, which helped secure Italy’s support for the deal. But even with the agreement signed, it still needs approval from the European Parliament, where opposition remains strong.
In a survey from the European Farmers Association, nearly 70% of farmers expressed worries about the potential negative impacts of the deal. French President Emmanuel Macron has voiced concerns too, fearing farmer dissatisfaction could fuel support for far-right political parties in future elections.
The path ahead is uncertain. João Paulo Cavalcanti, a Brazilian trade lawyer, highlighted that it will depend on the European Parliament’s willingness to approve the deal.
In a world of shifting alliances, this agreement may redefine trade relationships between Europe and South America for years to come.
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