Mercosur bloc leaders meet to fast-track EU trade deal

Member nations and the European Union in June agreed to a deal that will eliminate nearly all tariffs on two-way trade.

Macri/Bolsonaro in Santa Fe, Argentina July 2019
A deal in June between the European Union and Mercosur - a South American trading bloc that includes Brazil, Argentina, Paraguay and Uruguay - has been hailed as a breakthrough on international free trade for both regions [Handout/Reuters]

Leaders from South America’s Mercosur trade bloc met Wednesday in Argentina to discuss how to fast-track their new free-trade deal with the European Union.

The presidents of Argentina, Brazil, Paraguay and Uruguay appeared together in the city of Santa Fe, in Argentina’s Pampas grain belt, less than a month after agreeing to the landmark agreement with the EU.

The deal, which has been two decades in the making, marks a rare win for free trade amid rising global protectionism, although it still needs to be ratified, in principle, by the multiple national parliaments involved. Mercosur leaders indicated they were eager to find a way to speed up implementation of the deal.

“We are all in favour that the deal could have a provisional entry point, based on the discussions each member [of Mercosur] is having with their own parliaments,” Argentina’s Foreign Minister Jorge Faurie told reporters late on Tuesday.

On Wednesday Argentine Production Minister Dante Sica said trade ministers were looking to speed up the deal coming into effect, which could happen on an interim basis for each country once local legislators approve it.

“Once all the legal issues and protocols are sorted, the idea would be that … once it was approved by the European Parliament, then each [Mercosur] country could begin tentatively operating once its own Congress gave the go-ahead,” he said.

The deal between two of the world’s largest trade blocs has been cheered by leaders in both regions, though it has raised some concerns about rising competition among farmers in Europe and industrial sectors such as automobiles in South America.

Brazil’s President Jair Bolsonaro on Wednesday said his country would push to include the automotive and sugar industries in the regional customs union.

The Mercosur trade bloc also now has its eye on further trade deals, including longer-term discussions for an agreement with the United States.

“The agreement with the European Union is not the finish line, but a starting point,” Argentine President Mauricio Macri said at the meeting. “It is an opportunity for Mercosur to seek more in our ambitious agenda of international negotiations.”

The bloc is also in talks with the European Free Trade Association (EFTA) bloc – made up of Iceland, Norway, Liechtenstein and Switzerland – and with Canada to reach treaties similar to the one agreed with the EU.

Faurie said a deal with EFTA could be stuck in the second half of the year and with Canada in the first half of 2020.

The presidents of Bolivia and Chile, not formal Mercosur members but with close ties in the region, will also participate in the summit of leaders in Santa Fe, where there was a strong police presence in the streets on Wednesday.

The meeting will also see Brazil assume the presidency of the Mercosur trade bloc from Argentina.

Source: Reuters