Implementation of Mercosur agreements with the European Union should cover 31% of world exports of goods, points out CNI

The implementation of the agreement between Mercosur and the European Union must integrate a market of 800 million inhabitants with more than US$ 100 billion in bilateral trade in goods and services. Together, the two groups of countries are expected to account for around 25% of world GDP. The data are from the Strategic Association Agreement between Mercosur and the European Union.

In this context, in a joint declaration, the National Confederation of Industry (CNI) and the Confederation of European Companies (BusinessEurope) support the Strategic Association Agreement between Mercosur and the European Union. The position is highlighted during the visit of the President of the European Union (EU) Commission, Ursula von der Leyen, to Brasília, this Monday (12).

According to the CNI, by promoting free trade together, Mercosur and European Union countries would cover almost a quarter of the global economy and 31% of world exports of goods. The preservation of the Brazilian environment and the promotion of standards related to sustainable development and the protection of human rights are among the requirements of the agreement so that countries that are part of Mercosur and the European Union can enjoy the economic benefits of this relationship.

“We are confident that the commitments agreed in 2019 allow both parties to promote bilateral trade and investment flows, diversify their supply chains, sustain well-paying jobs on both sides, while effectively protecting the environment and meet the highest standards of sustainable development,” says the CNI in a note.

According to the former Secretary of Foreign Trade and president of the Brazilian Institute of International Trade and Investments, Welber Barral, the agreement between Mercosur and the European Union is an opportunity for Brazil to give competitiveness to the national industry and expand the export basket.

“The agreement with the European Union would be the most important thing Mercosur could do. First, for the opportunity to attract investments. By attracting investment, you have a very interesting effect, which is intra-firm trade, parts and pieces, product assembly. This could help a lot in the industrialization of the region. Secondly, because the European Union is a demanding market, which has many technical and sanitary requirements, where you improve the competitiveness of the Brazilian industry”, he defends.

CNI data also indicate that, in 2022, bilateral trade between Brazil and the European Union reached a record level of almost €90.5 billion. In terms of investments, the country received nearly €277 billion and invested more than €132 billion.

According to the federal government, the expectation is to close the Mercosur agreement with the European Union in 2023. According to the Minister of Foreign Affairs, Mauro Vieira, the Brazilian government is engaged in concluding a balanced agreement.

“We are committed to finalizing the negotiations for the agreement between Mercosur and the European Union, seeking to ensure the balance of the instrument”, he says.

Mercosur-European Union agreement could yield between US$85 billion and US$125 billion over 15 years