The Mercosur-European Union agreement, nearing the end of its legal review, is poised to double Brazilian exports to preferential markets, from 13.8% to 27.4%, as stated by Tatiana Prazeres, the foreign trade secretary at the Ministry of Development, Industry, Trade, and Services (MDIC). This development follows the publication of the agreement's final texts by both trading blocs, with an official announcement made last Friday.
According to Prazeres, the agreement's ratification process involves a 65% approval by the European Council and a simple majority in the European Parliament. A notable feature of the treaty is its provision for bilateral application, allowing for its enforcement between the EU and individual Mercosur countries, circumventing the need for unanimous ratification by all Mercosur members. "If the European Union and Brazil, for example, ratify it, there's no need to wait for other Mercosur members," Prazeres explained.
The agreement's terms, particularly concerning sustainable development, are seen as beneficial for Brazil. It introduces new rules based on World Trade Organization (WTO) jurisprudence to prevent sustainability measures from acting as disguised trade restrictions. Furthermore, it establishes a dispute resolution mechanism to address any future legislative changes that could impede trade flows, thereby maintaining the agreement's balance.
Prazeres highlighted the agreement's impact on Brazilian exports, noting that it would significantly enhance market access for Brazilian products, with the inclusion of Mercosur's agreement with Singapore further increasing this figure to nearly 30%. Additionally, the agreement ensures the use of national data from Mercosur countries for compliance assessments, a critical demand from Mercosur during negotiations.
The treaty also aims to improve market access for bioeconomy and low-carbon products, with specifics yet to be negotiated. Moreover, a withdrawal from the Paris Agreement by any country could lead to suspension from the Mercosur-EU agreement, reinforcing the commitment to multilateralism and the sustainability agenda.
To address potential trade disruptions due to new EU legislative initiatives, the agreement introduces an arbitration mechanism for dispute resolution. This process allows for rebalancing trade relations through additional concessions or retaliatory measures, depending on the arbitration outcome, without necessitating the withdrawal of contested measures.
Source: Datamar News