EU to ink long-awaited trade deal with South American bloc

"The European Union will on Saturday sign a deal 25 years in the making with the South American trade bloc Mercosur, creating one of the world's largest free trade areas at a time of growing protectionism and volatility. The long-awaited agreement comes amid the sweeping use of tariffs and trade threats by US President Donald Trump's administration, which has sent countries scrambling for new partnerships. Together, the EU and Mercosur account for 30 percent of global GDP and more than 700 million consumers."

"The treaty eliminates tariffs on more than 90 percent of bilateral trade. The deal will favor European exports of cars, wine and cheese, while making it easier for South American beef, poultry, sugar, rice, honey and soybeans to enter Europe. The treaty between the EU and Mercosur nations Argentina, Brazil, Paraguay and Uruguay was agreed in Brussels last week despite fierce opposition from European farmers."

"They fear the deal will lead to an influx of cheaper South American products due to production standards they consider less stringent. Some in South America are also wary about the impact of the treaty. In Argentina, it is estimated that there could be a loss of 200,000 jobs just from the dismantling of the local automotive industry, trade and investment researcher Luciana Ghiotto told AFP."

The EU and Mercosur reached a comprehensive free-trade agreement after 25 years of negotiations, creating one of the world's largest trade areas amid rising global protectionism. The pact covers markets representing roughly 30 percent of global GDP and over 700 million consumers and removes tariffs on more than 90 percent of bilateral trade. The deal benefits European exports such as cars, wine and cheese and facilitates South American exports including beef, poultry, sugar, rice, honey and soybeans. European farmers fear cheaper imports due to perceived lower production standards. Argentina faces estimates of significant job losses in its automotive sector.

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