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The European Union and South America’s Mercosur trade bloc have struck an agreement on a long-anticipated free trade deal, European Commission President Ursula von der Leyen has announced.
After negotiations spanning more than 20 years and five years on from an initial deal, von der Leyen and her Mercosur counterparts said a deal had been reached on Friday in Uruguay’s capital, Montevideo.
“This is a win-win agreement,” von der Leyen said during a news conference alongside the presidents of the main Mercosur nations, including Argentina and Brazil.
“This agreement is not just an economic opportunity. It is a political necessity,” she added. “I know that strong winds are coming in the opposite direction, towards isolation and fragmentation, but this agreement is our near response.”
The agreement aims to create one of the largest free trade zones in the world, covering more than 700 million people and nearly 25 percent of global gross domestic product.
Much like the US-Mexico-Canada free trade agreement, its goal is to reduce tariffs and trade barriers, making it easier for businesses on both sides to export goods.
Mercosur comprises Brazil – which makes up the lion’s share of the bloc’s territory, economic output and population – along with Argentina, Paraguay, Uruguay and Bolivia, the newest member. Venezuela’s membership has been suspended indefinitely.
While South American leaders hailed the pact, the deal is not done for some of the European countries.
France has led a group of EU member states that still have objections to the pact with the country’s minister for trade, Sophie Primas, saying von der Leyen’s announcement on Friday “regards only her”.
“Today is not the end of the story,” Primas told the AFP news agency in a statement. “This only commits the commission, not the [EU] member states.”
The trade agreement requires approval from 15 of the 27 EU members representing 65 percent of the EU population along with a simple majority in the European Parliament.
The European farmers lobby Copa-Coge reiterated its opposition to the deal and called for protests in Brussels on Monday. The farmers have argued that Mercosur products do not meet EU standards and would create unfair competition.
