International Desk, (EFE).- The Mercosur bloc completed the approval of the trade agreement with the European Union (EU) on Tuesday, after Paraguay became the final country to ratify the treaty, concluding more than 25 years of negotiations. This paves the way for provisional application of the pact while it awaits definitive ratification by the European Parliament.
With the decision by the Paraguayan Parliament, the four Mercosur partners (Argentina, Brazil, Uruguay, and Paraguay) have greenlighted the historic agreement signed on Jan. 17 in Asunción, which creates one of the world’s largest free trade areas.
The treaty will encompass a market of approximately 720 million people and a combined economy estimated at about 22 trillion dollars.
In commercial terms, it provides for the liberalization of the vast majority of trade between the two regions, allowing more than 90% of the South American bloc’s exports to enter the European market without paying tariffs.
Uruguay and Argentina were the first Mercosur countries to ratify the treaty in their respective parliaments. Their governments hailed the votes as a key step toward consolidating the international integration of their economies.
Brazil subsequently ratified the treaty through a legislative decree approved by its Congress, which was promulgated also on Tuesday in a joint session attended by Executive and Legislative authorities.
Brazilian Vice President and Minister of Development, Industry, and Trade, Geraldo Alckmin, stated that the provisional entry into force of the agreement could materialize in the coming months. This would allow the application of some tariff reductions to begin even before final ratification by the EU.
For the agreement to begin provisional application, the EU and the Mercosur countries must complete a formal procedure that includes the exchange of diplomatic notes.
Paraguay acts as the depositary of the treaty for the South American bloc, meaning Brussels must send a verbal note to Asunción, and each Mercosur country must send a communication to the European Commission.
Once this exchange is completed, the agreement may begin provisional application between the EU and each Mercosur country starting on the first day of the second month following the corresponding notification. This mechanism will allow some of the commercial provisions to enter into force before the entire ratification process is complete.
However, the full entry into force of the treaty will depend on the ratification of the European Parliament. Before ruling, the European Parliament awaits an opinion from the Court of Justice of the European Union on whether the agreement is compliant with community treaties.
That process could take up to two years.
The EU-Mercosur agreement regulates the trade of goods and services between both regions and includes commitments in areas such as investment, public procurement, sanitary standards, and regulatory cooperation.
In the case of agricultural products, a sector where Mercosur countries are highly competitive, 99% of trade will be liberalized, with immediate elimination of tariffs for numerous goods.
For Mercosur, the treaty represents an opportunity to expand access to one of the world’s largest markets and diversify its exports. For the EU, it means reinforcing its economic presence in Latin America and strengthening commercial ties with a resource-rich region that has growing energy and agro-industrial potential. EFE
int-lnm/dmv
