The European Union is nearing final approval of the EU-Mercosur Partnership Agreement (EMPA) with South American countries and the EU-Mexico Modernised Global Agreement (MGA), two long-gestating trade deals that aim to open up new markets for European businesses.
The European Commission presented the final version of the deals, which will require the Council and Parliament’s approval to be effective. In the eyes of the Commission, the deals will expand trade and support jobs across the bloc. The deal will lower tariffs on European products for several crucial industries, including cars, heavy machinery, and pharmaceuticals. Additionally, imports to Europe will benefit, particularly raw materials such as fluorspar from Mexico.
One of the biggest stumbling blocks was agriculture, with European producers worried about a possible invasion of cheaper products from South America. The Commission swore that it addressed the concerns presented by the sector. “EU businesses and the EU agri-food sector will immediately reap the benefits of lower tariffs and lower costs, contributing to economic growth and job creation,” said European Commission President Ursula von der Leyen.
Also, Commissioner for Agriculture and Food Christophe Hansen tried to reassure the agriculture sector, saying that “If we look at the facts, this agreement is balanced for the EU agri-food sector. The imports will be limited and our farmers’ interests carefully safeguarded.” As part of the deal with Mercosur, “sensitive products will only come in via calibrated quotas that will be phased-in over several years.”
Under the deal, quotas for exports from Mercosur countries will be maintained at very low percentages to prevent unbalancing European producers. For instance, the EMPA currently has a 1.5% quota for beef. As part of the safeguards mentioned by Hansen, a supplement policy can enact bilateral safeguards to protect some crucial and sensitive sectors.
The new agreement will also ensure the same health and safety standards for imports from South America. To enforce this, the Commission will sponsor several initiatives to align standards between trade partners and conduct more audits and checks in non-EU countries.
The agreement with Mexico, on the other hand, should open up a significantly new market for EU exports in food. Mexico is a net food-importing country, and the new deal will eliminate tariffs on several European food exports to the country, including cheese, meat, pasta and drinks. As part of the deal, hundreds of European protected foods will now also be covered in Mexico.
