Commission President Ursula von der Leyen announced on Friday in Brussels that 'provisional application' is possible after Argentina and Uruguay ratified the agreement on Thursday. She called the ratification by Argentina and Uruguay good news and said the Commission had already been granted the authority for this by the EU countries.
The agreement creates one of the largest free trade zones in the world. Together, the involved countries represent more than 700 million consumers and about 30 percent of the global gross domestic product. More than 90 percent of trade between the two blocs would be free of import tariffs under the agreement.
Earlier benefits
For companies, provisional application means they can benefit sooner from lower import duties, adjusted customs rules, and improved market access. The main export products from Mercosur to the EU are agricultural products and minerals. From the EU, exports include machinery, chemicals, and pharmaceutical products.
Promotion
The agreement remains controversial. France has strongly opposed the agreement and tried to block its implementation. The French government initially warned that provisional application would violate democratic principles. But recently, Agriculture Minister Genevard said that considering new US trade sanctions, the multiannual European budget, and the need for a more autonomous EU trade position, it would be wise to implement Mercosur as soon as possible.
Farmers
Farmers in various European countries have also expressed concerns. They fear competition from cheaper agricultural products from South America. Protests against the agreement have taken place in several EU countries.
At the same time, there is also support for the Commission’s move. Supporters argue that the European Union must act quickly in a world of increasing international competition. According to them, the agreement offers economic opportunities and new growth prospects for European companies, including small and medium-sized enterprises.
With provisional application, the agreement partially takes effect while the legal and political processes in Europe are still ongoing. The final future of the agreement depends on the court’s ruling and the later vote in the European Parliament.