Description: The European Parliament has submitted the latest version of the EU – Mercosur trade agreement which is expected to be implemented after votes in the Parliament are concluded. The agreement, which has been a sticking point between the two economic blocs, was negotiated in the last 25 years as proponents and critics on both sides weighed in on the benefits and shortcomings of the agreement. The latest proposal outlined guardrails for critical economic sectors for European countries such as farming and agriculture while projections estimated that the EU would remove duties on 92% of imports from the Mercosur bloc over the next 10 years, while the Mercosur bloc would remove duties on 91% of imports from the EU bloc. The outturn of the vote still hangs in the balance despite the opposition block of countries such as France, Italy and Poland significantly decreasing critics, however, environmentalists and climate activists remain adamant in their claims that the agreement would significantly impact the environment especially in the Mercosur countries, significantly impacting larger swathes of green territory such as the Amazonian rainforest.
Impact: The European Union would most likely adopt the agreement as it seeks to expand the bloc’s trade portfolio still rallying from the impacts of the US tariffs, unstable global market conditions and Chinese economic consistency. Europe’s industrialism views the Mercosur bloc of countries as a potential launchpad for diversification and an alternative option for shelving out products from the automotive, steel and technological industries. The Mercosur bloc of countries comprised of Brazil, Argentina, Uruguay and Paraguay would also benefit from the amended provisions as they would also decrease their economic dependence on imports from the US and China. The adoption of the agreement arrives in a period when Trump’s tariffs are legally contested, and the global market is still relatively unstable as the US – China trade war is yet to reach its conclusion.