The European Union (EU) and the Mercosur group of South American countries are on the verge of concluding a trade agreement that has been two decades in the making, according to the Financial Times.
The Financial Times states that the deal aims to enhance economic ties and create a market of 780 million people, potentially saving EU businesses over €4 billion annually in tariffs.
Despite strong opposition from France, which cites environmental concerns and the impact on local farmers, the EU is prepared to push forward, says the business newspaper.
Despite the aforementioned environmental concerns, the agreement is said to include commitments to the Paris Agreement on climate change. It is also stated that Germany, Spain, and several other member states support the deal, believing it will bolster economic relations amid global tensions.
However the negotiations still face some hurdles, including Mercosur’s objections to EU climate and deforestation requirements, as well as disputes over protected food names and automotive industry safeguards. Officials nonetheless remain optimistic about resolving these issues before the year’s end.
European Commission President Ursula von der Leyen, expected to attend the G20 summit in November, could play a crucial role in finalising the agreement with Brazilian President Luiz Inácio Lula da Silva, writes the FT.
Meanwhile, according to the press agency Agencia EFE, Uruguay, who have the Presidency of Mercosur at the moment, have been “accelerating dialogue between Mercosur and China in search of a trade agreement”.
Last month, Bolivia joined the Mercosur South American trade block, which also includes Argentina, Brazil, Paraguay and Uruguay.
