Mercosur, EU: geopolitical signal, essential agreement for Europe. We protected farmers
“This agreement is essential for the EU: for our economic prospects, job creation, trade diversification and as a geopolitical signal.
The Council has already approved it. President von der Leyen will travel to Paraguay on Saturday to sign it.”
This is what AGRICOLAE learns from European Commission sources.
“To be clear: no decision has been taken on the provisional application of the Mercosur agreement. The Commission’s objective in the coming weeks will be to work with Members of the European Parliament to gain their support, before the final vote of approval on the agreement.
We believe that this is an agreement that the European Parliament can support with full confidence.
The EU-Mercosur agreement creates the largest free trade area in the world. It will offer great opportunities for our companies and our citizens, in every EU Member State. And we have built in all the necessary protections for our farmers.”
The EU-Mercosur agreement is of significant strategic importance for the European Union, in particular for the strengthening of political and economic relations with Latin America, an area of growing geopolitical importance.
STRATEGIC AND ECONOMIC VALUE OF THE AGREEMENT
Table of Contents
- STRATEGIC AND ECONOMIC VALUE OF THE AGREEMENT
- RATIFICATION PROCESS AND LEGAL PROFILES
- PROTECTION OF FARMERS AND SAFEGUARD REGULATIONS
- PROVISIONAL APPLICATION OF THE AGREEMENT
- MAIN CONTENTS OF THE COMMERCIAL AGREEMENT
- AGRICULTURAL POLICY AND SAFETY MEASURES
- SAFEGUARD MECHANISMS AND DISPUTE RESOLUTION
- HEALTH AND PHYTOSANITARY REGULATIONS
It was highlighted that the agreement complements the EU’s network of trade partnerships with Latin American countries, strengthening the European agenda on market access and export support. In this context, the agreement takes on a central role also in light of China’s growing economic presence in the region.
In fact, the agreement aims to rebalance commercial influence in Latin America, allowing European companies to recover competitiveness compared to Chinese operators and consolidate their position in key sectors of the Mercosur economy.
RATIFICATION PROCESS AND LEGAL PROFILES
Once signed, the agreement will be sent to the European Parliament for examination and possible approval. During the debate, a motion was presented to request an opinion from the Court of Justice of the European Union on specific legal aspects of the agreement.
If this motion is accepted, the ratification process could be delayed by an estimated 18 to 24 months. However, it was clarified that the trade part of the agreement does not require ratification by individual Member States, unlike the broader Partnership Agreement.
PROTECTION OF FARMERS AND SAFEGUARD REGULATIONS
To address the concerns of the agricultural sector, a safeguard regulation has been proposed to protect European farmers from any negative effects resulting from increased imports from Mercosur countries. This regulation, already agreed during the trilogue, should be submitted to the Council for a vote in February.
The aim is to simplify and accelerate the activation of safeguard measures, making them more effective in the event of market disruptions. The agreement also includes specific provisions for products considered sensitive.
PROVISIONAL APPLICATION OF THE AGREEMENT
The agreement contemplates the possibility of provisional application by the Mercosur countries that complete ratification. However, some questions have been raised regarding the possible scenarios in the event that one or more countries do not ratify the agreement.
In this regard, the agreement includes provisions aimed at preventing a single Mercosur state from blocking the entire structure of the agreement. In the event of relevant legal issues, the Court of Justice of the European Union may be called upon to rule.
MAIN CONTENTS OF THE COMMERCIAL AGREEMENT
From a technical point of view, the agreement introduces a 5% threshold for the increase in imports, beyond which investigations can be launched to adopt corrective measures. For the automotive sector, duties on an initial quota of 50,000 vehicles will be significantly reduced, from 35% to progressively lower levels.
The agreement favors strategic sectors for the EU, such as machinery, cheese, wine and cars, strengthening European competitiveness also against Chinese producers. It was also reiterated that maximum residue limits for pesticides remain independent of trade agreements and that the EU continues to apply rigorous health standards to all imports.
AGRICULTURAL POLICY AND SAFETY MEASURES
In the next Multiannual Financial Framework, the European Union has allocated €6.3 billion for an agricultural safety net, complemented by a further €45 million for agricultural flexibility in the current budget. The EU has also introduced tariff quotas and safeguard measures for specific agricultural products.
A particular commitment has been made to protect geographical indications and traditional products, taking into account requests from the agricultural world and implementing targeted support measures.
SAFEGUARD MECHANISMS AND DISPUTE RESOLUTION
It was clarified that there is no automaticity in the provisional application of the agreement and that the European Commission has not yet taken a final decision on the matter. The safeguard measures envisaged are fully legitimate under the agreement and can be activated in case of harm to European producers.
Mercosur countries, including Paraguay, have the possibility to challenge such measures through the dispute resolution system provided for in the agreement.
HEALTH AND PHYTOSANITARY REGULATIONS
European authorities reiterated the effectiveness of the EU sanitary and phytosanitary control system, as demonstrated by the timely detection of infringements. The EU currently imports around 200,000 tonnes of beef from Mercosur countries, with a new additional quota of 99,000 tonnes.
Brazil, the main exporter of beef to the EU, has consolidated trade relations with the Union. All imported products must fully comply with European health standards, and in case of violations there are concrete consequences for exporters.
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