Ministers in Lula's government celebrate Mercosur-EU agreement: 'a historic victory'

247 - Ministers in Lula's government highlighted on Friday the importance of the agreement between Mercosur and the European Union, after leaders of both blocs gave their approval for the signing of the proposal. The negotiations represent a market with more than 720 million people and more than US$22 trillion in Gross Domestic Product (GDP). For Brazil, the largest economy in Mercosur, the treaty expands access to a market of approximately 451 million consumers. The project is expected to be signed this month. 

"The Vice-President and Minister of Development, Industry, Trade and Services, Geraldo Alckmin, said the agreement should be signed in the coming days and our expectation is that it will come into effect this year," Alckmin stated in an interview with journalists after EU countries gave the green light for the European bloc to join the agreement, after 25 years of negotiation. "If we approve, for example, the internalized agreement in the first half of this year, if the Brazilian Congress votes on it in the first half of the year, we will not depend on Argentina, Paraguay and Uruguay. It will come into effect immediately."

The Minister of Planning and Budget, Simone Tebet, highlighted that the agreement will allow Brazilian products to reach more consumers and increase investments, which could help reduce inflation in the country. "A historic milestone for multilateralism! The Mercosur-European Union Agreement is one of the most significant economic developments of recent decades for Brazil and Mercosur," she wrote in a statement. 

“More access to consumer markets, more investment, more integration between countries and, above all, more products available, greater competition, helping to lower inflation even further. It will combine economic growth, employment and income with sustainability, technology and innovation,” he added. 

The Minister of Agrarian Development, Paulo Teixeira, also celebrated. “In times of attacks on multilateralism, the approval of the agreement between Mercosur and the European Union, creating the largest free trade market in the world, is a great victory for Brazil and the @lulaoficial government. And Japan, Canada, and the United Kingdom also want agreements with Mercosur.”

The Minister of Agriculture and Livestock, Carlos Fávaro, told... Veja The fact that Mercosur and the EU have given their approval for the signing of the agreement "is something historic, expected for 26 years, creating the largest economic bloc in the world. "Brazil is happy, Europe is happy, and everyone will benefit from this," stated the head of the ministry. 

When questioned about the resistance of some countries to the agreement, such as France, Poland, Ireland, Hungary, and Austria, which voted against the treaty, the minister stated that the "safeguards" foreseen in the text can still be negotiated. "We shouldn't focus on the glass being half empty, but rather on the size and expansion of the opportunities that are being created."

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Most of the 27 countries in the European Union expressed support for the agreement at a meeting of ambassadors held in Brussels. Only Austria, France, Ireland, Hungary, and Poland voted against it, according to Reuters. Belgium abstained. The project needs to be approved by at least 15 of the 27 member states, representing 65% of the bloc's population.

According to the Institute for Applied Economic Research (Ipea), no sector in Brazil as a whole should be negatively impacted over the next 17 years: services are expected to grow by 0,41% during this period, mineral extraction by 0,08%, and the manufacturing industry by 0,04%.

Under the agreement, Mercosur will eliminate tariffs on 91% of EU exports, including automobiles. The European Union will have to progressively eliminate tariffs on 92% of exports from the South American bloc over a period of up to ten years.

Mercosur will also eliminate tariffs on EU agricultural products, such as the 27% tariff on wines and the 35% tariff on spirits. 

In the case of more sensitive agricultural products, the EU will offer larger quotas, including an additional 99.000 metric tons of beef, while Mercosur will grant the EU a duty-free quota of 30.000 tons for cheeses.

According to Reuters, the EU will also apply quotas for poultry, pork, ethanol, rice, sugar, honey, corn, and sweet corn. For Mercosur, quotas will be applied for powdered milk and infant formula. The additional imports represent 1,6% of beef consumption in the EU and 1,4% of poultry consumption.