A historic agreement between Mercosur and the European Union was signed this Saturday (17), representing the conclusion of a negotiation process that lasted 26 years. The free trade agreement promises to open new commercial opportunities for both blocks, but their implementation still faces significant challenges both in the political and bureaucratic spheres. Carol Pavese, professor of International Relations at the Mauá Institute, explained in the Now CNN that the signed agreement does not represent the conclusion finality of the process.
“We cannot consider that this agreement will already come into force and that it has already been finalized”, warns the expert. After signing, each Mercosur member country (Brazil, Argentina, Uruguay and Paraguay) will need to submit the treaty to its constitutional process of ratificationin a way independent.
On the European side, the obstacles are even bigger. A group of 150 European deputies has already expressed opposition to the agreement and got it for January 21st at the European Parliament. “This motion intends to subject the text to a legal assessment by the European court, which could suspend the process of ratification for up to two years“, explains Pavese. and Poland lead the resistance to the agreementwhich could make its definitive approval difficult.
Economic benefits and competitive pressure
For Brazil and other Mercosur countries, the agreement represents a departure from a global scenario marked by protectionism. “This is an agreement that comes in a important moment. Today we see protectionism that has penalized us a lot, penalized our industry, penalized our agriculture too, which has a very large export agenda”, highlights Pavese.
Among the expected benefits is tariff reduction for Mercosur agricultural products on the European market, although with established quotas. For Brazilian consumers, the agreement promises access to European products with more competitive prices, especially premium and specific items. It is also planned greater presence of European companies in the services sector in the countries of the South American bloc.
The professor highlights that the agreement will also bring challenges to the national industry: “All of this increases the diversity of what is offered to us, but it also puts greater pressure on our national industry to have to face European competition without so much tariff protection.” This competitive pressure, according to her, could lead Brazilian companies to improve both the quality of products and services and the prices offered to consumers.
It is important to highlight that what is being signed is an interim agreement, focused mainly on commercial part. The permanent and complete agreement, which includes political and cooperation chapters, will need to pass through each of the 27 member states of the European Union, with no defined deadline for completion. Furthermore, the European Union has already approved safeguard measures which allow the agreement to be stopped if it identifies chronic losses for sensitive sectors of its economy, especially in the agricultural area.
