talks about landmark free trade agreement The trade war between the EU and four South American countries started long ago, the euro isn’t even in circulation yet, China has not yet joined the World Trade Organization and Venezuela remains the United States’ largest oil supplier.
But faced with very different geopolitical contexts and difficult odds—including Strong opposition from powerful protectionist lobby -The European Union and South American Union are known as common market of the south Expected to be officially signed A quarter of a century in the making The trade agreement was signed at a ceremony in Paraguay on Saturday.
It is the first major trade agreement for Mercosur, which includes the region’s two largest economies, Brazil and Argentina, as well as Paraguay and Uruguay. Bolivia is the newest member and is not involved in the negotiations but could join the agreement in coming years.
this transatlantic trade agreement – Eliminating tariffs on products ranging from Argentine steaks and Brazilian copper to German cars and Italian wine – still requires approval from the Treasury Department european parliament.
The importance of creating one of the world’s largest free trade zones, with more than 700 million people and a quarter of global GDP president donald trump yank america break away from the international economy This was not lost on the signatories.
This time, it’s not about Trump vs. China
president of the european commission Ursula von der Leyen Last week’s agreement was hailed as a strong endorsement of multilateralism “in the face of an increasingly hostile and transactional world.” president of brazil Luiz Inacio Lula da SilvaThe 80-year-old called it a rare “triumph of dialogue, negotiation and cooperation.”
Experts say this victory comes at the expense of the U.S. and China as Trump aggressively Maintain U.S. authority in resource-rich areas and Beijing leverages its vast trade and loan Build influence.
“This is a signal that South American economies are seeking to avoid great power competition between China and the United States,” said Lee Schlenker, a fellow in the Global South Program at the Quincy Institute for Responsible Statecraft, a Washington think tank.
“This shows that South America can continue to flex its muscles in the international arena, diversify its trading partners and exercise a degree of autonomy that is often denied.”
South American ranchers rejoice
The agreement gives the South American country, known for its fertile land and skilled farmers, greater access to Europe’s vast agricultural markets at preferential rates.
In Argentina, exporters believe they will save tens of millions of dollars annually as the deal immediately eliminates 20% tariffs on the EU’s long-standing premium meat import quota scheme.
It’s a breakthrough for Argentina, a country that for decades has been left populist government that maintains the economy closure and prioritized the domestic market, even taxing agricultural exports to keep food prices down.
“We are in the midst of a paradigm shift,” said Carlos Colombo, president of the Canuelas cattle market in Buenos Aires province, which sells more than 12,000 cattle a day, many destined for Europe and China. “Argentina has reopened to the world.”
Argentinian President Javier Milley May Be Trump’s Strongest ideological allies in Latin America – sharing his Contempt for the United Nations and Paris climate agreement —but no one can call a radical liberal protectionist.
at first he laughed The notoriously slow-moving Mercosur was deemed irrelevant and threatened to be abandoned. But he has changed his tune since realizing the EU’s potential to eliminate tariffs and cut customs red tape.
“He sees this agreement as a way to revitalize and re-embody Mercosur,” said Marcelo Elizondo, an Argentine economic analyst who specializes in international trade.
The free trade craze has also infected Brazil’s long-closed economy. Apex, the Brazilian government’s investment agency, estimates that exports of agricultural products such as instant coffee, poultry and orange juice to the EU will reach $7 billion in the next few years.
European farmers lobby wins concessions
Squeezed by environmental regulations and worried about an influx of cheap food from across the Atlantic, farmers The highway is blocked and Come to the streets European capitals expressed anger at the deal.
The EU has added environmental and animal welfare concerns as it struggles to appease their concerns during decades of negotiations Safeguards of the Agreement Strict quotas are imposed on the export of South American meat and sugar to ensure that local products remain competitive.
Even so, angry farmers Finally convinced FranceRussia, Poland and a number of other countries opposed the deal in an intra-EU vote last week, depriving the deal’s supporters of a chance to show unity they had hoped. Only in Italy and other agricultural powerhouses Came here Previously, the EU provided generous subsidies of up to $52 billion to farmers.
“This is a pretty big bribe,” said Jacob Funk Kirkegaard, a nonresident senior fellow at the Peterson Institute for International Economics. “EU leaders consider this deal to be very important and worthwhile at this time.”
“Cattle for Cars”
Some are calling the deal a “cars-for-cattles” deal, reflecting the view that the European auto industry will also win big.
was hit hard Competition is becoming increasingly fierce with china and sky high US tariffsthe self-proclaimed German auto giant such as Volkswagen BMW and BMW are delighted with the push, as are European producers in the pharmaceutical, construction and machinery industries at being able to reach hundreds of millions of consumers.
Experts say the elimination of 35% tariffs on auto parts and vehicles provides a rare opportunity for European industrial exporters to regain market share in South America from cheaper Chinese rivals.
“The failure to sign the EU-Mercosur Free Trade Agreement could push Latin American economies closer to Beijing’s orbit,” said Agathe Desmarais, senior policy fellow at the European Council on Foreign Relations.
But many still held their breath, watching for years as negotiations progressed slowly only to collapse at the last minute.
“There are still steps that need to be taken… Europe is still very careful,” Colombo said, straining to listen to the shouts of cowboys herding hundreds of roaring cattle onto trucks.
“Let’s not forget, this is historic. We have never had an agreement like this before.”
____
Associated Press writer Mauricio Savarese in Sao Paulo contributed to this report.