The News
The EU and five South American countries have finalized a wide-ranging trade deal that will cut tariffs on more than 90% of goods within the market of 700 million people, following 20 years of negotiations.
“Today marks a truly historic milestone,” European Commission President Ursula von der Leyen told a press conference.
The Mercosur deal will see businesses “benefit from reduced tariffs, simpler customs procedures and preferential access to some critical raw materials,” she said, adding: “This will create huge business opportunities.”
The deal will create the largest free trade zone in the world, allowing EU countries to export cars and machinery to South America, and provide Mercosur countries with a large European market for their agricultural and industrial products.
The agreement remains deeply controversial in Europe, however, where farmers fear the deal will lead to a glut of cheap grains and meats that will outprice the bloc’s agricultural sector.
France and Poland have opposed the deal, but would need to gain the support of countries representing 35% of the bloc’s population to stop it.
The treaty’s European supporters, including Germany and Spain, argue that the agreement will help the bloc diversify its trade, given collapsing exports to Russia, worries about dependence on China, and looming US tariffs.