(Bloomberg) --
The European Union and Mercosur finally struck a free-trade deal in Brussels after 20 years of talks, an agreement that counters a global trend towards greater protectionism.
Both sides are looking to expand goods shipments worth almost $102 billion a year as tariffs on around 92% of two-way trade will be eliminated over the next 10 to 15 years. Implementing the deal will take between two and three years, with ratification by the parliaments of all its signatories as the last stage. Until then, this is what the two blocs have agreed on, according to a document published by Argentina's foreign ministry and a statement from Brazil's foreign ministry.
LATAM REACT: Mercosur-EU Deal Offers Hope for Productivity Boost
On agricultural goods
- The EU loosened the rules on 99% of agricultural imports into Mercosur
- For 81.7% of those, it will eliminate import tariffs
- For the remaining 17.7%, it will offer quotas or preferential rates
- Only about 100 farm products are excluded from the deal
On industrial goods
- The EU will relax restrictions on 100% of its trade in industrial goods, while Mercosur will free up 90%
- The EU will immediately scrap tariffs on 80% of Mercosur's industrial exports to the EU
- Mercosur has up to 15 years to liberalize sensitive sectors gradually
- The agreement favors inter-industrial trade, as it reduces tariffs on parts and capital goods
Services
- Brazilian companies will gain access to EU public purchase tenders, a market estimated at $1.6 trillion
- Services such as communication, tourism, transport and finance services
What about the timing?
There are four key steps from now:
- Legal review
- Document translation
- Signing by the two blocs
- Parliamentary approval
Read more: Under-Fire Latin Presidents Celebrate Big Win on EU Trade Deal
To contact the reporters on this story: Carolina Millan in Buenos Aires at cmillanronch@bloomberg.net;Jorgelina do Rosario in Buenos Aires at jdorosario@bloomberg.net
To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, Bruce Douglas
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