Approved this Friday (9)the trade agreement between Mercosur and the European Union could generate an increase of around US$7 billion in Brazilian exports, according to an estimate by the Brazilian Trade and Investment Promotion Agency (ApexBrasil). The pact, negotiated for more than 25 years, is considered the largest economic agreement ever signed by the two blocs.
According to Apex, Brazilian industry should feel immediate effects from the tariff reduction provided for in the agreement. Among the main benefiting sectors are transport machinery and equipment, electric power engines and generators, auto parts, such as piston engines, and aircraft, which benefited from an immediate tariff reduction. Opportunities are also highlighted for products such as leather and skins, stonework, knives and blades and items from the chemical industry.
Apex also assesses that the agreement can increase the diversification of Brazilian exports. Currently, more than a third of Brazil’s sales to the European Union are made up of products from the manufacturing industry, which tends to gain even more space with the reduction of trade barriers.
For commodities, ApexBrasil assesses, the impact will be gradual. The agreement provides for the progressive reduction of tariffs on products such as poultry meat, beef and ethanol, which must be brought to zero within a period of up to 10 years, respecting quotas and safeguard mechanisms. These clauses allow the monitoring of imports and seek to protect, mainly, European rural producers.
Multilateralism
In a statement, the president of ApexBrasil, Jorge Viana, stated that the agreement represents a victory for multilateralism in a global scenario marked by trade disputes and the weakening of international institutions.
“This agreement goes in the opposite direction to what the world is going in. The World Trade Organization itself has lost importance, and we are talking here about the biggest economic agreement in the world”, he highlighted.
According to Viana, the market formed by Mercosur and the European Union brings together more than 700 million consumers and a Gross Domestic Product (GDP) close to US$ 22 trillion. “It is second only to that of the United States, around US$29 trillion, and surpasses that of China, which is around US$19 trillion”, he highlighted.
