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LATIN AMERICA ADVISOR

LATIN AMERICA ADVISOR

A daily publication Of the dialogue

October 6, 2023

Can Mercosur and the E.U. Finally Reach a Trade Deal?

Paraguayan President Santiago Peña has issued a December ultimatum for the Mercosur trade bloc and the European Union to reach a free trade agreement. // File Photo: Paraguayan Government.

Q

  • Paraguayan President Santiago Peña said Sept. 25 that the European Union and Mercosur must finalize their trade deal by Dec. 6, the day Paraguay takes over the trade bloc’s presidency, or Mercosur will walk away from the deal and seek agreements with Asian countries instead. Negotiations on a trade deal between the European Union and Mercosur have dragged on for more than two decades. What are the main reasons for the slow pace of the negotiations? How likely are the two sides to conclude negotiations by early December, and what has been holding up the agreement’s ratification? How united is Mercosur, and how would a failure to reach a deal affect bilateral relations with the European Union?

A

Bartłomiej Znojek, Latin America analyst at the Polish Institute of International Affairs: “The European Union and Mercosur concluded negotiations on the trade pillar—part of the Association Agreement, which includes political dialogue and cooperation pillars—in June 2019 thanks to rare favorable political conditions that have quickly gone away. The clash between the European Union and former Brazilian President Jair Bolsonaro over his government’s decisions to loosen the protection of the Amazon quickly became the main obstacle to the ratification. The European Union attempted to solve the issue by proposing a protocol with additional environmental guarantees. It didn’t withdraw from this requirement even after Luiz Inácio Lula da Silva took over as president of Brazil and committed to restoring protection and tackling deforestation of the Amazon. The E.U. anti-deforestation import measure—in force since June—added to…”

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The Inter-American Dialogue publishes the Latin America Advisor every business day for a distinguished membership of informed corporate leaders, scholars, and government officials invested in Latin America’s development and future. The Advisor‘s highly regarded Q&A section covers questions submitted by subscribers themselves. Commentators regularly include heads of state, business leaders, diplomats, economists, analysts, and thought leaders from around the world. Many of the world’s largest and fastest-growing companies subscribe to the Advisor. To subscribe, click here. For terms and conditions, click here. For more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.
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Joyce Chang
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