Closer ties between the blocs” | Camila Hermano analyses the EU-Mercosur agreement that provides for the gradual elimination of tariffs for the export of certain goods and services between the two blocs
(STG News – 26 August 2021)
“Mundializando” is the title of my fortnightly column on the website In Your Defence, also part of the STG News network. Whether it’s a neologism or not, it aptly describes my aim: to address various issues that influence the local ecosystem, always from a systemic and cross-border perspective.
From the start, Mercosur. It’s been 30 years since it was formed. It was born as a customs union with the philosophy of regional integration, to participate actively and jointly in world trade. However, while in 1997 trade within the bloc reached a peak of 25 per cent of its members’ total trade, today that figure is just 14 per cent. The fact is that the bloc has been trying to reverse the lost time and the barriers imposed between its own members. It has already agreed to reduce tariffs with the vast majority of South American countries and, after 20 years of negotiations, finally reached a trade and cooperation agreement in 2019 with the European Union (EU).
The EU-Mercosur Agreement provides for the gradual reduction and elimination, over 10 years, of tariffs for the export of certain goods and services between the two blocs, including agro-industrial products from Brazil, which will bring an undeniable competitive advantage to the Centre-West region. Mercosur countries must quickly prepare for barriers other than tariffs. These are phytosanitary and sustainability requirements – see the Green Pact.
Brazilian producers, industrialists and businesspeople, organised in cooperatives and entities such as CNA and CNI, understand the importance of the Agreement and the urgency of adapting their production to the regulatory requirements that have been imposed naturally or acrimoniously, as in the case of France, for the effective implementation of the Agreement.
Enforcing the Trade Agreement already signed with the EU, considered the largest pact between economic blocs (25% of world GDP) and, above all, “ploughing the land” to reap the potential rewards of this relationship, is by far Mercosur’s biggest and most important challenge. At the end of the day, by meeting real targets, everyone wins. Goiás has everything it takes to get on the train, even at the station, with a window seat.
