EU-MERCOSUR*
TRADE AGREEMENT
BUILDING BRIDGES FOR TRADE AND
SUSTAINABLE DEVELOPMENT
*Argentina, Brazil, Paraguay and Uruguay
KEY FACTS
A region of over 260 million consumers
The 5th largest economy outside the EU with an annual GDP of
€2.2 trillion
Closed markets with high tariff and non-tariff barriers
A destination for EU goods worth €45 billion (in 2018)
and EU services worth €23 billion (2017)
A market for 60,500 EU companies
A major destination for EU investments, with
€381 billion in investment stocks in 2017
Trade is essential to growth and job creation. EU exports to Brazil alone support already 855,000 jobs in the EU
and another 436,000 in Brazil. More exports means more jobs.
KEY BENEFITS FOR EU COMPANIES
1. Cutting tariffs
→ The agreement will eliminate high customs duties in key EU export sectors:
‣ Cars and parts 14%
35% 14-20% 18%
‣ Machinery
‣ Chemicals
‣ Pharmaceuticals
and for products kept so far out of the Mercosur market, such as clothing and footwear.
For some of these tariffs the phasing out will take place over a period of several years.
→ First mover advantage: The EU will be the first major trading partner to conclude a trade agreement with the
Mercosur bloc. Mercosur will now give EU companies much better access to its market than it gives to businesses from
other countries.
→ Improved competitiveness: With the elimination of tariffs, the many European companies already established in the
Mercosur countries will be able to import parts and intermediate goods more easily.
2. Easier customs and compliance procedures
The two sides will simplify their customs procedures and work together more closely on technical regulations
and standards, so that any differences that may exist do not stop EU companies from exporting to Mercosur.
3. Selling services and setting up a business presence
Mercosur countries have thus far given limited access to services providers from other World Trade
Organization (WTO) countries but EU companies are already involved in providing Mercosur with
telecommunications, financial, business and transport services, among other sectors. The agreement will
address many significant barriers they face. It will also help other companies seeking to provide services or
set up a service or manufacturing business in a country of Mercosur. They will enjoy greater legal certainty
and a level playing field.
4. Getting access to public contracts
The EU-Mercosur trade agreement will allow EU firms to bid for public contracts on equal terms with
Mercosur companies. So far, this market was mostly closed to EU companies. Mercosur countries are not
part to the plurilateral Government Procurement Agreement and have so far not given access to its public
tenders to any third countries.
5. Supporting small and medium-sized companies
Small and medium-sized companies often cannot afford entering new export markets due to red tape at
customs, costly testing and certification requirements. In many cases, this adds to a lack of knowledge of
regulatory requirements and processes to place their products on the export market. Thanks to the agreement,
they will now benefit from a new online platform providing easy access to information on market
requirements and customs rebates.
SUPPORTING AND RESPECTING INTERESTS OF EU FARMERS
The trade agreement will make it easier for European farmers and food producers to make the most of new
opportunities in the countries of Mercosur, which represent a large market of over 260 million people.
This will be achieved by:
‣ removing high tariffs for EU main export products
‣ preventing imitation of EU traditional foodstuffs
‣ making food safety procedures clearer, more predictable and less cumbersome for EU exporters
Mercosur is already a major market for EU exports of olive oil frozen potatoes, malt, chocolates, vegetable
and fruit (e.g. pears, plums, kiwis, apples), soft drinks, as well as wines vodka and whiskey. The agreement
will open up new opportunities for those and other EU products by removing high customs duties in a
market with an increasingly high purchasing power.
357 European traditional products recognised as Geographical Indications will now also
be protected from imitation in the four Mercosur countries. This is the largest coverage ever
achieved in any trade agreement and it will help securing and increasing their market share.
EU agri-food exporters will now benefit from faster, simpler and more predictable
procedures, as well as clear and transparent audit rules and will be able to continue
exporting from non-affected zones despite a presence of a pest or disease in some other
areas within the EU (‘the regionalisation principle’).
Find out more on EU-Mercosur agreement and agriculture here
UPHOLDING THE EU’S RIGOROUS FOOD SAFETY STANDARDS
Any product arriving to Europe must comply with the EU’s stringent food safety standards.
The EU-Mercosur trade agreement does not change anything in that respect. The agreement also reaffirms the ‘precautionary
principle’, the right of both sides to adopt measures to protect human, animal and plant health, including in situations where
scientific information is not conclusive. So in short:
‣ There is no change for EU stringent food safety rules
‣ The EU remains free to regulate with all necessary precaution
‣ All imported food must comply with EU’s own standards
At the same time, the provisions of the agreement will help us better tackle common challenges such as antimicrobial
resistance, promote animal welfare standards and reinforce the flow of information to help keeping unsafe products out of the
market.
Find out more on EU-Mercosur agreement and food safety here
CONTRIBUTING TO SUSTAINABLE PRODUCTION
The EU-Mercosur agreement is based on the premise that trade should not happen at the expense of the environment or
labour conditions; on the contrary, it should promote sustainable development.
‣ The EU and Mercosur commit to effectively implement the Paris Climate Agreement and agree to cooperate on
the climate aspects of trade between the two sides. This includes tackling deforestation.
Paris Agreement includes among others: ‣ The EU and Mercosur agree that they will not lower
a pledge by Brazil to reduce by 2025 labour or environmental standards in order to promote
its net greenhouse gas emissions by trade and attract investment. To the contrary, the dedicated
37% compared to 2005 levels chapter includes specific commitments related to environment
protection, workers’ rights and promotion of responsible
a pledge to stop illegal business conduct.
deforestation in the Brazilian
Amazon and to reforest 12 million ‣ The 'precautionary principle' is upheld in the
hectares by 2030 agreement and ensures that the EU and the Mercosur
countries can continue to regulate, including on environment or
a pledge by the EU to reduce its
labour matters, even if this affects trade, also in situations
domestic emissions by at least 40%
where scientific information is not conclusive.
by 2030
Civil society organisations will be given an explicit role in overviewing the implementation of the agreement and flag any
environmental or labour concerns.
Find out more on EU-Mercosur agreement and sustainable development here
