The letter highlights the strategic importance of strengthening trade connections, fostering investments and advancing sustainable development, which are central objectives of this agreement.
It has been addressed to Presidents of the European Parliament, European Council, European Commission, and the Hungarian Presidency of the Council, and forwarded to the Presidency of Mercosur.
The businesses are urging policymakers to take prompt action toward ratification, enabling the EU and Mercosur to enhance their competitiveness in a dynamic global environment.
The associations pointed out in 2022, trade between the EU and Mercosur reached more than €159bn ($168.34bn) in goods and services, with mutual investments nearing approximately €380bn.
These economic connections support millions of jobs across both regions, emphasising the significance of the EU-Mercosur agreement in mitigating geopolitical instability and supply chain disruptions.
Specifically, the agreement promises:
- Market Access and Expansion: Removing trade barriers will allow for smoother trade flows, offering greater access to both markets.
- Supply Chain Resilience: Strengthening trade ties will help ensure a stable supply of essential goods, reducing vulnerability to disruptions.
- Deeper Collaboration: The agreement will promote shared progress in areas such as sustainable development, labour standards, and environmental protection.
The EU and Mercosur reached the agreement in 2019 after two decades of negotiations. This political agreement establishes an ambitious and comprehensive trade framework as part of a broader Association Agreement between the two regions.
It aims to solidify a strategic political and economic partnership while creating substantial opportunities for sustainable growth, all while considering environmental concerns and protecting the interests of EU consumers and sensitive economic sectors.
The EU is recognised as the first major partner to establish a trade agreement with Mercosur, which includes Argentina, Brazil, Paraguay, and Uruguay.
This region-to-region agreement will significantly reduce tariffs on EU exports to Mercosur, enhancing competitiveness for EU companies by saving approximately €4bn annually in duties.
For various industrial sectors within the EU, this agreement is expected to facilitate increased exports of products that have previously faced high tariffs. These products include clothing and footwear (35%), and knitted fabrics (26%), automobiles (35% tariff), car parts (14-18%), machinery (14-20%), chemicals (up to 18%), and pharmaceuticals (up to 14%). Additionally, the EU agri-food sector stands to gain from reduced high tariffs imposed by Mercosur on EU export products.
In January, the European apparel and textile industry confederation and 22 industry associations sent a joint letter to EU and Mercosur leaders, urging the swift finalisation of the EU-Mercosur trade negotiations.
