This weekend, the European Union and Mercosur signed a Partnership Agreement (EMPA) and an Interim Trade Agreement (iTA), a move wich will create one of the biggest trade zones in the world covering a market of around 700 million consumers.

The Agreement will create a wide range of economic opportunities in the EU by:

• Removing tariffs on EU exports, including agri-food and key industrial products such as cars, machinery, and pharmaceuticals, saving EU businesses €4 billion worth of duties per year; 

• Making it easier, quicker and safer to invest in key supply chains, including critical raw materials and related goods;

• Strengthening economic security and supporting the digital and green transitions on both sides;

• Helping the EU and Mercosur to shape global trade rules in line with the highest EU standards. 

The deal is expected to increase EU agri-food exports to Mercosur by up to 50% by:

• Reducing tariffs on key EU agri-food products, such as wine, spirits, dairy, and olive oil;

• Protecting 344 EU Geographical Indications, high-value traditional food and drink products, from unfair competition and imitation.

Next, the EMPA will be subject to ratification by all Member States, following their national procedures. At the same time, the ITA will follow EU-only ratification process as it falls under EU exclusive competences. This will require the consent of the European Parliament and the adoption of a decision on the conclusion by the Council, after which it will enter into force.The iTA will expire once the EMPA enters into force.