The concern now among Mercosur member countries is that the EU will use environmental laws related to deforestation, not foreseen in the agreement, to suspend trade between the blocs through the European Deforestation Regulation
The European Union (EU) wants a free trade agreement with Mercosur as long as it does not have any burden on the countries of the old continent. The problem is that this possibility does not exist. Invariably, when protectionist barriers fall, some sectors will benefit, and others will not. The winners will be the most productive, and the losers will be the least efficient.
The concern now among Mercosur member countries is that the EU will use environmental laws related to deforestation, not foreseen in the agreement, to suspend trade between the blocs through the European Deforestation Regulation (EUDR). The concern is valid, since European countries may activate the device to meet pressure from farmers, under the false claim that Brazilian products are grown in deforested areas.
Another source of concern is the possibility of the European Union suspending the agreement whenever imports by European Mercosur countries increase by 5% in relation to the average of the last 3 years.
With all these restrictions, the free trade agreement between the blocs could become weak, causing harm to consumers in all countries involved. The worsening for the population is confirmed by academic evidence and international experience that show the gains from the advancement of globalization.
In addition to productivity increases, improved product quality, cheaper goods and increased income, the agreement could i. reduce European trade dependence on the USA, especially after the tariff war started by Donald Trump, and ii. Help face competition with Asian countries, especially China.
For the EU, it is not just a question of economic gains, but also of survival.
*This text does not necessarily reflect the opinion of Jovem Pan.
