EU and Mercosur sign historic agreement in Paraguay

By BKM | Berkemeyer

Paraguayan President Santiago Peña hosted in Asunción the ceremony for the signing of the EU-Mercosur agreement, which had been 25 years in the making. The agreement creates one of the largest free trade areas in the world, spanning 31 countries with 700 million citizens.

The partnership represents a win-win deal. With the EU already being Mercosur's second largest trading partner, the agreement unlocks the next level of that relationship. Europe needs secure access to the raw materials that underpin the clean transition, while Mercosur countries need access to more investment and technology.

The deal eliminates billions of euro in tariffs and opens procurement markets, but it also enshrines shared ambitions on sustainability, with strong commitments on sustainable development and on mutual support in the transition to climate neutrality.

Regarding Geographical Indications (GIs), the deal will recognize 344 European GIs, banning imitations as well as misleading terms, symbols, flags or images. Only genuine products, such as, for example, Roquefort cheese made in Roquefort, France, will carry the GI name. 

The Agreement will make it easier for EU companies of all sizes to do business in Mercosur by:

-removing or reducing Mercosur tariffs, up to an expected value of €4 billion per year;
-reducing the cost of meeting Mercosur's rules and regulations, which often differ from international standards;
-simplifying complex procedures to prove that EU products meet Mercosur's technical requirements or standards for food safety or animal and plant health;
-increasing access and a level playing field for EU businesses in key service industries;
-removing most preferences given to domestic firms in government contracts both at federal and state level;
-providing more information on how to do business in Mercosur countries, especially for SMEs.

Following the signature of the EMPA, the EU and Mercosur will now follow their respective procedures to work towards the ratification of the Agreement.