Mercrosur trade agreement seen benefiting EU
August 7, 2019 |
Deal opens a huge market for European exporters, analyst says
The trade agreement that Mercosur and the European Union (EU) signed in June will benefit European exporters more than their South American counterparts as high tariffs are phased out in Brazil and Argentina, LatinFinance has heard.
"In general, the EU has much more to win because of access to this region, which is the most closed in the world and has very high tariffs," said Guillermo Tolosa, executive director of the Uruguayan economic think tank Ceres.
Mercosur members Brazil, Argentina, Uruguay and Paraguay charge average duties of 35% on European goods with the rate going up to 43% on some products. South American exports, however, pay an average duty of 10% when they reach European ports, Tolosa said.
Europe's textile and apparel, automotive and pharmaceutical industries stand to gain the most from the trade agreement, while South American exporters need to improve product quality standards for more demanding European markets, he said.
As part of the initial agreement signed on June 28, Mercosur has seven to 15 years to cut tariffs, while the EU has 12 years. The final agreement is expected to be ratified in 2021.