\t\t\t \t\t\t\t\t \t\t\t\t\t The Mercosur-EU trade agreement is closer to becoming a reality after over 25 years of negotiations, following the approval by a majority of the European Union (EU) member states.\u00a0<\/p>\n
The deal \u2014 which will be signed on Monday, and must then be approved by the European Parliament to enter into force \u2014 will be key for Argentina\u2019s exports. One Argentine official described it to the Herald as a \u201croute map to modernization.\u201d However, critics fear imports from Europe could harm national industry.<\/p>\n
The trade accord will allow Argentina and the other Mercosur members \u2014 Brazil, Paraguay and Uruguay \u2014 to expand their export markets, especially for the crucial agricultural sector.\u00a0<\/p>\n
It will also grant easier access to manufactured goods and technology from Europe, which are less developed in South America, except for certain industries, like Brazil\u2019s automobile sector.<\/p>\n
\u201cFor Mercosur, this is far more than a trade deal between blocs: it\u2019s a strategic long-term decision,\u201d said Fulvio Pompeo, secretary of international relations for Buenos Aires City Government.<\/p>\n
\u201cIt allows the countries of the region to position themselves as key partners in the global economy, associated with one of the world\u2019s most important economic areas, with clear rules, quality standards, and shared commitments.\u201d<\/p>\n
European countries that specialize in manufacturing, like Germany, have backed the deal, while others with strong agricultural sectors, like France, have opposed it, arguing that cheap goods from South America will hurt local farmers.<\/p>\n
While Brazil has been the country leading the negotiations, Argentina opposed it at times. In the past, Peronist governments argued that Europe\u2019s conditions meant the deal was not balanced.\u00a0<\/p>\n
During Alberto Fern\u00e1ndez\u2019s tenure, in December 2023, former Argentine Foreign Minister and current lawmaker Santiago Cafiero said that if the EU\u2019s conditions prevailed, the agreement would limit Argentina\u2019s exports and broaden the productive, financial and technological breach between the two regions.<\/p>\n
Despite being critical of Mercosur\u2019s efficiency, current Argentine President Javier Milei has backed the deal. \u201cThe timeframe for economic opportunity is always short, and it cannot be subordinated to the eternity of bureaucracy and politics,\u201d he said during the last Mercosur summit, in December.<\/p>\n
\u201cMORE GOOD NEWS,\u201d he posted on X after the agreement was greenlit in Brussels, forwarding a message from Argentina\u2019s Foreign Minister Pablo Quirno about the approval.<\/p>\n
\u2018Preferential position\u2019 \u201cThe most important thing is that we will have flexible rules in sanitary, environmental and social terms. Signing this agreement guarantees a preferential position for us,\u201d said Gustavo Id\u00edgoras, president of the Argentine Oil Industry Chamber (Ciara) and director of the board of the Cereal Exporters Center (CEC), speaking with the Herald.<\/p>\n
Id\u00edgoras argued the European agricultural industry is in \u201ca process of reduction or extinction in upcoming years,\u201d and added that the deal would therefore encourage investment in South American agriculture. \u201cEurope\u2019s food industry needs to see the Mercosur as the recipient of their investment and development of their production.\u201d<\/p>\n
Andrea Sosa, a dual PhD in Social Sciences and Rural Studies who works in Argentina\u2019s CONICET research institute analyzing food systems, told the Herald that the deal is positive from the perspective of the Mercosur states\u2019 governments because they \u201cneed to generate foreign currency earnings,\u201d hence why Brazil was so adamant about the deal\u2019s approval.<\/p>\n
\u201cIt will open up more markets and allow an \u2018invasion\u2019 of products from Argentina and the Mercosur in European markets, which could create more exports and more foreign currency income,\u201d Sosa said. \u201cThis is exactly why some EU countries are rejecting it.\u201d<\/p>\n
She warned the agreement could raise prices at supermarkets, butchers and greengrocers in Argentina,\u00a0because the possibility of selling to lucrative European markets could push prices up locally as Argentine and European customers compete for products.\u00a0<\/p>\n
\u201cThe markets will obviously always sell to the highest bidder,\u201d she said.<\/p>\n
Ricardo Carciofi, lead researcher on economic development at CIPPEC think tank, expected the deal to have the opposite effect on consumer prices.<\/p>\n
\u201cWe can expect an expansion of the import basket and greater competition on the offer side,\u201d he said. \u201cAs commercial channels are consolidated, the pressure we\u2019d see would be downward.\u201d<\/p>\n
Pompeo, the capital\u2019s international relations secretary, agreed. He said that the deal promoted competition and stability, adding that \u201cclosed economies generate less offer and higher prices.\u201d<\/p>\n
Impact on industry Critics have argued that the deal will harm Argentine manufacturing, as it will be easier and cheaper to buy those goods from Europe instead of producing them.\u00a0<\/p>\n
At the same time, the agreement will boost the agricultural sector, deepening a dynamic in which the country mostly exports primary goods and depends on first-world countries for manufacturing products, not allowing local industries to grow.<\/p>\n
Argentina has traditionally been a country with a strong agricultural sector and, despite past attempts at developing a manufacturing industry, it has never blossomed. Unrestricted imports have also severely harmed national industries in the past.<\/p>\n
\u201cIt means that the European Union will sell us manufactured goods and we will sell them primary products,\u201d said Eric Calcagno, former Argentine ambassador to France and ex lawmaker, in an interview with Radio Gr\u00e1fica in December. <\/p>\n
\u201cIt is a colonial relationship.\u201d<\/p>\n
Calcagno believes that the deal is in line with Milei\u2019s policy of \u201cdestroying Argentine industrial development and sustainable and family agriculture.\u201d<\/p>\n
\u201cUnlimited imports of foreign products with an overvalued exchange rate: that is an incentive for imports and a punishment for exports,\u201d Calcagno said.<\/p>\n
Time to compete However, Id\u00edgoras told the Herald that the deal will not have a negative impact on Argentine manufacturing industries because import duties on products coming from Europe as part of the deal \u201cwill take 10 years to be lowered.\u201d\u00a0<\/p>\n
This will give the local industry time to compete with the EU countries, which have high production and commercialization costs, he said.<\/p>\n
\u201cThe only sector that could have been affected was the automotive industry, but there have been agreements with Europe in this sense, so there should not be any negative impact,\u201d he said.<\/p>\n
The deal could also benefit Argentina\u2019s knowledge economy and exports of services, since the country already has a strong presence in everything from creative industries and IT to healthcare, according to Carciofi.<\/p>\n
In this sense, he said, \u201cinteresting prospects are opening up for the relationship between the two regions.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The Mercosur-EU trade agreement is closer to becoming a reality after over 25 years of negotiations, following the approval by a majority of the European Union (EU) member states.\u00a0 The deal \u2014 which will be signed on Monday, and must then be approved by the European Parliament to enter into force \u2014 will be key […]<\/p>\n","protected":false},"author":23,"featured_media":24616,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7350,5237,414,3013,7351,684],"tags":[7348,5234,595,3009,7349,4243],"class_list":["post-24615","post","type-post","status-publish","format-standard","has-post-thumbnail","category-agribusiness-in-argentina","category-agro","category-business","category-eu-mercosur-trade-deal","category-industrial-production-in-argentina","category-industry","tag-agribusiness-in-argentina","tag-agro","tag-business","tag-eu-mercosur-trade-deal","tag-industrial-production-in-argentina","tag-industry"],"_links":{"self":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts\/24615","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/comments?post=24615"}],"version-history":[{"count":0,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts\/24615\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/media\/24616"}],"wp:attachment":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/media?parent=24615"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/categories?post=24615"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/tags?post=24615"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}