The Association Agreement between the European Union (EU) and Mercosur is a historic trade deal that has been in the making for almost two decades. The agreement was signed in June 2019, following 20 rounds of negotiations that started in 1999.
Mercosur, short for Southern Common Market, is a regional bloc comprising of South American countries including Argentina, Brazil, Paraguay, and Uruguay. The EU is the world`s largest trading bloc, comprising of 27 member countries.
The Association Agreement between the EU and Mercosur is aimed at facilitating greater trade and investment between the two regions, leading to economic growth for both sides. The agreement covers various areas, including trade in goods, services, investment, and intellectual property rights.
Under the trade in goods component of the agreement, both regions agreed to remove tariffs on a wide range of products, particularly agricultural goods, which are of significant importance to Mercosur countries. This would make it easier for Mercosur countries to sell their products in the EU, encouraging increased exports to the region.
Furthermore, the agreement would also facilitate greater access to services for both sides. This would allow EU companies to provide services in Mercosur countries and vice versa, leading to increased investment in the service sector.
The intellectual property rights component of the agreement would provide greater protection for intellectual property across the regions. This would create a more secure environment for companies to operate and invest in both regions.
The Association Agreement between the EU and Mercosur has, however, faced criticism from various groups, particularly environmentalists. Deforestation in the Amazon rainforest has been a significant concern, and some groups argue that the agreement could lead to increased deforestation in the region.
The agreement has also been criticized for its potential impact on small local producers in Mercosur countries who may struggle to compete with larger companies from the EU.
Despite the criticisms, the Association Agreement between the EU and Mercosur presents significant opportunities for both regions to expand their trade and investment activities. The agreement represents a historic milestone in international trade relations and is expected to lead to increased economic growth and job creation for both sides.