EU and Mercosur Seal Landmark Trade Pact

The European Union and the Mercosur countries have signed this Saturday the free trade agreement with which the two regions culminate almost 26 years of negotiation and establish a new framework of relations.The agreement, with the European camp and half a dozen countries against it, may enter into force on an interim basis, but will have to go through a tense ratification process for its definitive application.

The President of the European Commission, Ursula von der Leyen, and the President of the European Council, António Costa, as well as the Commissioner for Trade, Maros Sefcovic, represented the European Union at the ceremony held in Asunción, the capital of Paraguay .

The presidents of Paraguay, Santiago Peña, Uruguay, Tamandú Orsi, and Argentina, Javier Milei, attended the signing ceremony. The President of Brazil, Luiz Inácio Lula da Silva, was unable to attend the agreement due to his agenda.

Von der Leyen recalled that the EU and Mercosur account for “almost 20% of the global Gross Domestic Product (GDP)” and that “this agreement sends a very powerful message to the world, it reflects a clear and deliberate choice,“ she explained.

For his part, the President of Argentina, Javier Milei, pointed out that the signing of the free trade agreement “does not constitute a point of arrival”, but “is a starting point within a broad plan of economic linkage with various international players”.

For the fashion industry, the EU-Mercosur agreement has direct and quantifiable implications. Currently, apparel products exported from the European Union to the South American bloc are subject to tariffs ranging from 8% to 12%. According to the agreed timetable, these levies will be phased out in eight equal annual tranches.