The EU-Mercosur trade deal has started to come into force following ratification by Argentina, Brazil, Paraguay and Uruguay.
Technically speaking the deal is “provisionally applied” until all EU countries have ratified it too, but experts say the core of the deal – allowing tariff reductions and preferential market access – “take effect immediately for qualifying goods”.
As part of the deal, the EU put in place safeguard measures and limited quotas for sensitive agricultural products like lamb and beef to prevent south America flooding the European market.
But the Irish Farmers’ Association (IFA) remains deeply sceptical about the agreement and fears for its impact on Ireland’s agricultural sector.
“We have opposed Mercosur for over two decades. The issue we had with the deal then, particularly around traceability and lack of standards, has not gone away”, said the IFA’s President, Francie Gorman recently.
The Irish government is also sceptical about the agreement
But the EU insists the deal will bring huge benefits, including to farmers, with lower prices and the possibility of exporting Irish goods to south America without any, or much lower tariffs, from now on.
“In times of geopolitical and economic uncertainty, the provisional application of the EU-Mercosur agreement is an important signal. Europe needs new, reliable relationships with democratic partners”, said German MEP, Anna Cavazzini, who is chair of the European Parliament’s Internal Market Committee.
“The agreement is not perfect”, she added.
“There are still questions regarding forest protection, the protection of sensitive agricultural markets, and the enforcement of workers’ rights. We take these points seriously and will continue to work to ensure that sustainability and fair competition are truly implemented.
Nevertheless, given the current global challenges, it is right to strengthen cooperation with the Mercosur countries.”
The President of the European Commission, Ursula von der Leyen, and the President of the European Council, António Costa, are expected to speak to south American leaders by video link this afternoon.
Ahead of that call, President von der Leyen said:
“A lot of work went into getting this landmark deal over the line; now it’s time to invest the same effort into making sure our citizens and businesses reap its benefits immediately.
From day one, tariffs are reduced and new market opportunities are opened.
This is good news for EU businesses of all sizes, good news for our consumers, and good news for our farmers who will gain valuable new export possibilities while being fully protected in sensitive sectors.”
Under the terms of the agreement, tariffs on over 91 percent of EU goods exported to Mercosur will gradually be eliminated.
The European Commission says “key EU exports” such as cars, pharmaceuticals, wine, spirits, and olive oil will immediately gain new opportunities to export to one of the biggest trade zones in the world.
“EU farmers and agrifood producers will also see lower or eliminated duties, making their products more competitive in Mercosur. The agreement is expected to increase EU agrifood exports to the region by 50 percent, with the first tariff-rate quotas and reductions taking effect tomorrow.”
The EU – Mercosur agreement will create a market of 720 million people.
Back in February, the European Parliament approved safeguard clauses setting out how the EU could temporarily suspend tariff preferences on agricultural imports from the Mercosur countries, if a surge in these imports were to harm EU producers.