projected to profit the most from tariff reductions. The agreement will moreover allow European companies to bid for public procurement contracts – a market traditionally closed to third countries – by providing a more transparent tendering process. Comment In the midst of rising uncertainty in the international trade context, the European Union and Mercosur defy the trend and affirm their commitment to multilateralism and their eagerness to engage in the global economy. The EU-Mercosur Agreement is both a testament to the European Union’s commitment to open rules-based trade and the export of its values through trade, and to Mercosur’s readiness to grow the region’s economies. The EU-Mercosur Agreement not only aims to multiply the opportunities for European companies to enter and consolidate their presence in a market with immense economic potential, but at the same time, it will impel the economic reforms and modernization processes that are taking place in Mercosur. However, some voices from both sides of the Atlantic are already being raised against what some have termed the “cows-for-cars” agreement, citing the potential impact of the deal on deforestation, and the perception that the viability of certain European sectors could be at risk if Mercosur agricultural goods are not held to the same standards. In response, the EU has emphasized that the final text of the agreement (to date, only a general overview has been released), will include a chapter on sustainable development. In any event, such a momentous agreement is certainly likely to have political ramifications, both in terms of domestic regulatory reform and in upcoming electoral processes. It is also likely that the agreement could improve economic relations between Mercosur and other key global economic players. The European Union has consistently sought cooperation with regional players in Latin America and the Caribbean since the 1990s. It has concluded trade agreements with the Caribbean Forum (Cariforum) and the Central America group, three members of the Andean Community, and bilateral agreements with Chile and Mexico. Mercosur was the only key trading partner in the region with which it did not have a preferential trade agreement. As for Mercosur, it has FTAs with Bolivia, Chile, Colombia, Ecuador and Venezuela, and framework agreements with Mexico and Morocco. It has also taken steps to establish free trade areas by entering into preferential trade agreements with India, Mexico and the Southern African Customs Union (SACU). This new deal makes the European Union the first major economic partner to sign a trade agreement with Mercosur, and deepens the regions’ economic cooperation legal framework.
1 European Commission, “EU and Mercosur reach agreement on trade”, https://ec.europa.eu/commission/presscorner/detail/en/ip_19_3396 2 European Commission, “EU-Mercosur Trade Agreement: Building Bridges for Trade and Sustainable Development”, Key Facts, June 2019, http://trade.ec.europa.eu/doclib/docs/2019/june/tradoc_157954.pdf
about the authors andrew cannon partner, london florencia villaggl of counsel, new york silvia marroquin law clerk, new york
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