Treaty delivers message in support of fair, sustainable and rule-based trade, says European Commission president
\nNews Desk
\nBRUSSELS
\nThe EU and South American bloc Mercosur have agreed a free trade treaty, concluding two decades of talks and committing to more open markets in the face of a rising tide of protectionism.
\nThe EU becomes the first major partner with which Mercosur has struck a trade pact, offering EU firms a potential head start. The EU is already Mercosur\u2019s biggest trade and investment partner and its second largest for goods trade.
\nThe two regions launched negotiations exactly 20 years ago and stepped up efforts to reach an accord after Donald Trump\u2019s presidential victory led the Europeans to freeze talks with the US and seek other global trading allies.
\nThe opening to Europe also offers more avenues for development in South America, which has been tugged in recent years between the ascent of top trading partner China and enduring US influence in the region.
\n\u201cThis deal delivers a real message in support of open, fair, sustainable and rule-based trade because trade creates jobs for all concerned,\u201d European Commission President Jean-Claude Juncker told a news conference in Japan\u2019s western city of Osaka.
\nHe was among the European leaders and Argentine President Mauricio Macri, gathered for the Group of 20 summit, who shared a podium at the event.
\n\u201cThis deal promotes our values and supports a multilateral, rules-based system,\u201d Juncker said, adding that the commitment spoke a \u201clot, louder than 1,000 communiques.\u201d
\nHis remarks came as some G20 leaders signalled difficulty in efforts to draft a summit communique, with disagreements ranging from trade to climate change. The deal stands in contrast to the Trump administration\u2019s aversion to multilateralism.
\nThe EU\u2019s drift away from the US has spurred on a free trade deal with Canada and helped to reach accords with Japan and Mexico.
\nNow, after some 40 rounds of talks, the Europeans have reached a provisional deal with the trade bloc founded by Argentina, Brazil, Paraguay and Uruguay.
\nThe EU and Mercosur are together responsible for 720 million people and a quarter of global gross domestic product, says the government of Brazil, whose president, Jar Bolsonaro, hailed the deal on Twitter as historic and one of the most important trade pacts of all time.
\nIf ratified, the deal will be a victory for Bolsonaro, whose right-wing politics face a chilly reception in much of the world, as well as Argentine President Mauricio Macri, who is battling for reelection this year amid a steep recession.
\nIn terms of tariff cuts, the trade deal could be the EU\u2019s most lucrative to date, with about \u20ac4 billion ($4.55 billion) of duties saved on exports, four times more than its deal with Japan.
\nEurope has its eyes on greater access for manufactured goods, notably cars, which face tariffs of 35 percent. It wants its firms freed to compete for public tenders, and to sell more wine and cheese. Mercosur aims to boost exports of farm commodities.
\nBrazil said the pact would remove import tariffs on several farm products, such as orange juice, instant coffee and fruit. It will also get a new 99,000-ton quota of beef at a 7.5 percent tariff, phased in over five years, and tariff-free 180,000-ton quotas each of sugar and poultry.
\n\u201cIt is true that the agreement will make us compete with the best, but the agreement gives us room to maneuver,\u201d Miguel Braun, Argentina\u2019s economic policy secretary, said on Twitter.
\n\u201cEurope will eliminate the bulk of its barriers in five years, and Mercosur will apply a gradual tariff reduction over a period of up to 15 years, which will allow the private sector to adapt.\u201d
\nBefore it takes effect, the deal needs final approval from Mercosur, the European Parliament and constituent countries, which Brazil\u2019s government has conceded could take years.
\nFrance is one of the European countries expressing concern about a surge in beef imports, while environmental groups, whose influence is stronger in the new European Parliament, say the pact could worsen deforestation.
\nThe parties both committed to adopt the Paris climate change pact and a special chapter on sustainable development will cover issues such as forest conservation and labor rights.
\nEU Agriculture Commissioner Phil Hogan said he recognized the concerns of farmers, including those from his country, Ireland, but said that the bloc\u2019s free trade pacts were opening markets for EU farmers. <\/p>\n","protected":false},"excerpt":{"rendered":"
Treaty delivers message in support of fair, sustainable and rule-based trade, says European Commission president News Desk BRUSSELS The EU and South American bloc Mercosur have agreed a free trade treaty, concluding two decades of talks and committing to more open markets in the face of a rising tide of protectionism. The EU becomes the […]<\/p>\n","protected":false},"author":2,"featured_media":71868,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-71842","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"\n