Geert Bourgeois welcomes the trade agreement between the European Union and South American countries

2 July 2019

Geert Bourgeois is pleased with the trade agreement between the European Union and Mercosur, the customs union between Argentina, Brazil, Uruguay and Paraguay. The European Union is the first major trading partner to be able to conclude an agreement with these countries. The deal will give the Union access to the hitherto relatively closed South American markets. The agreement took more than twenty years to reach.

Opening to a market of 780 million people

Geert Bourgeois says: “With this agreement, the European Union is sending out an important signal that there is also a positive path for international cooperation, away from protectionism. Once implemented, the agreement will provide access to a market of 780 million people and generate a profit of four billion euros for the European Union in terms of tariffs alone. That’s four times more than the ambitious trade agreement between the European Union and Japan, which entered into force earlier this year.”

What does the agreement entail?

Our companies will be the first to gain access to a previously closed market. The economic importance of the agreement is undisputed:

  • Over time, 91% of the tariffs on European exports and 92% on imports from the Mercosur countries will be removed.
  • Non-tariff barriers will be reduced, among other things through the use of international standards.
  • A strong chapter on sanitary and phytosanitary standards such as food safety will ensure that European standards remain guaranteed.
  • The protection of geographical designations is guaranteed (regional agri-food products).
  • There will be reciprocal access to the public procurement markets of the central government services.
  • The markets will become more easily accessible for service companies, such as maritime transport.

The agreement also protects our defensive interests. Just think of the agricultural sector. Should economic damage nevertheless be caused by unexpected increases in imports, a bilateral safeguard mechanism will come into effect.

Important for Flanders

Other chapters of the agreement that are important for Flanders concern access for SMEs to the market of the Mercosur countries. But also on sustainable development, including commitments to labour and environmental standards and corporate social responsibility. “We will analyse the content of the political agreement further in terms of Flemish interests in the coming period. I am already welcoming this ambitious agreement on the basis of the elements available today,” says Geert Bourgeois.

Which steps are still in progress?

Now that the official end of the negotiations has been announced, the texts are undergoing legal and linguistic polishing. Only then will they be submitted for approval by the Council. Finally, the agreement must go through both European and national approval procedures.

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