European Union agrees trade deal with Mercosur after 20 years

New EU trade pact ‘a bad deal for farmers

New EU trade pact ‘a bad deal for farmers

The European Union and the Mercosur bloc of four South American countries - Argentina, Brazil, Paraguay, and Uruguay - have agreed to draft wording for a free-trade deal after nearly 20 years of talks, European Commission President Jean-Claude Juncker said Friday.

"In the midst of global trade tensions, we are sending today a strong signal with our Mercosur partners that we stand for rules-based trade", president of the European Commission Jean-Claude Juncker said.

European Trade Commissioner Cecelia Malmstrom has called the deal her top priority.

The Mercosur trade bloc consists of Argentina, Brazil, Uruguay and Paraguay, a region with 260 million consumers.

In terms of tariff reduction, it could be the EU's most lucrative trade deal to date, with some 4 billion euros ($4.55 billion) of duties saved on its exports, four times more than its deal with Japan. It also wants to allow its firms to compete for public tenders, and to sell more wine and cheese.

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In a statement, Brazil said the deal would eliminate tariffs on products such as orange juice, instant coffee and fruit, which are exported from South America.

"Today's agreement also presents some challenges to European farmers and the European Commission will be available to help farmers meet these challenges". The treaty must now be approved by the European Parliament and individual member states. Some countries, such as France, fear a flood of South American beef on European markets.

"For this agreement to be a win-win, we will only open up to agricultural products from Mercosur carefully, with carefully managed quotas that will ensure that there is no risk that any product will flood the European Union market and thereby threaten the livelihood of European Union farmers".

The parties said they both committed to implement the Paris climate change agreement and that a special chapter on sustainable development would cover issues such as forest conservation and labor rights.

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