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EU and Mercosur reach agreement on trade

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The European Union and Mercosur reached today a political agreement for an ambitious, balanced and comprehensive trade agreement. The new trade framework – part of a wider Association Agreement between the two regions – will consolidate a strategic political and economic partnership and create significant opportunities for sustainable growth on both sides, while respecting the environment and preserving interests of EU consumers and sensitive economic sectors.

The EU is the first major partner to strike a trade pact with Mercosur, a bloc comprising Argentina, Brazil Paraguay and Uruguay. The agreement concluded today will cover a population of 780 million and cement the close political and economic relations between the EU and Mercosur countries. It represents a clear commitment from both regions to rules based international trade and will give European companies an important head start into a market with an enormous economic potential. It will anchor important economic reforms and modernisation undergoing in Mercosur countries. The agreement upholds the highest standards of food safety and consumer protection, as well as the precautionary principle for food safety and environmental rules and contains specific commitments on labour rights and environmental protection, including the implementation of the Paris climate agreement and related enforcement rules.

President of the European Commission Jean-Claude Juncker said: “I measure my words carefully when I say that this is a historical moment. In the midst of international trade tensions, we are sending today a strong signal with our Mercosur partners that we stand for rules-based trade. Through this trade pact, Mercosur countries have decided to open up their markets to the EU. This is obviously great news for companies, workers and the economy on both sides of the Atlantic, saving over €4 billion worth of duties per year. This makes it the largest trade agreement the EU has ever concluded. Thanks to the hard and patient work of our negotiators, this is matched with positive outcomes for the environment and consumers. And that’s what makes this agreement a win-win deal.”

Commissioner for Trade Cecilia Malmström added: “Today’s agreement brings Europe and South America closer together in a spirit of cooperation and openness. Once this deal is in place, it will create a market of 780 million people, providing enormous opportunities for EU businesses and workers in countries with whom we have strong historical links and whose markets have been relatively closed up to now. The agreement will save European companies over €4 billion in duties at the border – four times as much as our deal with Japan – whilst giving them a head start against competitors from elsewhere in the world. It also sets high standards and establishes a strong framework to jointly address issues like the environment and labour rights, as well as reinforcing sustainable development commitments we have already made, for example under the Paris Agreement. Over the past few years the EU has consolidated its position as the global leader in open and sustainable trade. Agreements with 15 countries have entered into force since 2014, notably with Canada and Japan. This agreement adds four more countries to our impressive roster of trade allies.”

Phil Hogan, Commissioner for Agriculture and Rural Development, said: “The EU-Mercosur agreement is a fair and balanced deal with opportunities and benefits on both sides, including for Europe’s farmers. Our distinctive, high quality EU agri-food products will now get the protection in Mercosur countries that they deserve, supporting our market position and growing our export opportunities. Today’s agreement also presents some challenges to European farmers and the European Commission will be available to help farmers meet these challenges. For this agreement to be a win-win, we will only open up to agricultural products from Mercosur with carefully managed quotas that will ensure that there is no risk that any product will flood the EU market and thereby threaten the livelihood of EU farmers.”

Main features of the EU-Mercosur trade agreement

The EU-Mercosur region-to-region agreement will remove the majority of tariffs on EU exports to Mercosur, making EU companies more competitive by saving them €4 billion worth of duties per year.

As regards EU industrial sectors, this will help boost exports of EU products that have so far been facing high and sometimes prohibitive tariffs. Those include cars (tariff of 35%), car parts (14-18%), machinery (14-20%), chemicals (up to 18%), pharmaceuticals (up to 14%), clothing and footwear (35%) or knitted fabrics (26%).

The EU agri-food sector will benefit from slashing existing Mercosur high tariffs on EU export products, chocolates and confectionery (20%), wines (27%), spirits (20 to 35%), and soft drinks (20 to 35%). The agreement will also provide duty-free access subject to quotas for EU dairy products (currently 28% tariff), notably for cheeses.

Mercosur countries will also put in place legal guarantees protecting from imitation 357 high-quality European food and drink products recognised as Geographical Indications (GIs), such as Tiroler Speck (Austria), Fromage de Herve (Belgique), Münchener Bier (Germany), Comté (France), Prosciutto di Parma (Italy), Polska Wódka (Poland), Queijo S. Jorge (Portugal), Tokaji (Hungary) or Jabugo (Spain).

The agreement will open up new business opportunities in Mercosur for EU companies selling under government contracts, and to service suppliers in the information technology, telecommunications and transport sectors, among others. It will simplify border checks, cut red tape and limit the use of export taxes by Mercosur countries. Smaller companies on both sides will also benefit thanks to a new online platform providing easy access to all relevant information.

While delivering significant economic benefits, the agreement also promotes high standards. The EU and Mercosur commit to effectively implement the Paris Climate Agreement. A dedicated sustainable development chapter will cover issues such as sustainable management and conservation of forests, respect for labour rights and promotion of responsible business conduct. It also offers civil society organisations an active role to overview the implementation of the agreement, including any human rights, social or environmental concerns. The agreement will also provide for a new forum to work closely together on a more sustainable approach to agriculture and, as part of the political dialogue under the Association Agreement, address the rights of indigenous communities. The agreement also safeguards the EU and Mercosur’s right to regulate in the public interest and preserves the right to organise public services in the way they consider appropriate.

EU food safety standards will remain unchanged and all imports will have to comply with the EU’s rigorous standards, as is the case today. The agreed food safety, and animal and plant health provisions will reinforce cooperation with the authorities of the partner countries and speed up the flow of information about any potential risks through a more direct and efficient information and notification system. In this way, the agreement will increase our efficiency in ensuring the safety of the products traded between the EU and Mercosur countries.

The trade agreement reached today is part of a comprehensive new Association Agreement under negotiation between the EU and Mercosur countries. It is composed of a political and cooperation pillar – on which negotiators already reached a general agreement in June 2018 in Montevideo – and the trade pillar. Beyond trade, the agreement will enhance political dialogue and increase cooperation in areas such as migration, digital economy, research and education, human rights, including the rights of indigenous people, corporate and social responsibility, environment protection, ocean governance, as well as fight against terrorism, money laundering and cybercrime. It will also offer increased possibilities for cooperation at multilateral level. The Association Agreement will complete the network of Association Agreements in the Americas and consolidate the relations with the important partners in the region, supporting EU positions on many global issues.

Another milestone trade agreement concluded by the Juncker Commission

Agreement Population covered Trade in goods Trade in services Tariff savings
for EU companies
Joint GDP
Canada 550 million €72 billion €35 billion €0.6 billion €18 trillion
Japan 639 million €135 billion €53 billion €1 billion €21 trillion
Mercosur 773 million €88 billion €34 billion Over €4 billion €19 trillion

Both sides will now perform a legal revision of the agreed text to come up with the final version of the Association Agreement and all its trade aspects. The Commission will then translate it into all official EU languages and submit the Association Agreement to EU Member States and the European Parliament for approval.

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Ebola: EU announces new funds to strengthen preparedness in Burundi

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The Ebola virus disease outbreak in the Democratic Republic of Congo continues to spread in the east of the country with a high risk of a spill-over into the neighbouring countries. The European Union is stepping up its assistance to Burundi with €465,000 to further strengthen Ebola preparedness measures by authorities and aid organisations in the country.

Christos Stylianides, Commissioner for Humanitarian Aid and Crisis Management, who is also the EU’s Ebola Coordinator, said: ”To effectively fight the Ebola virus we do not only have to address the affected cases in the Democratic Republic of Congo but also increase our efforts to prevent the disease from spreading to neighbouring countries like Burundi. The European Union is therefore supporting ongoing Ebola preparedness measures in the country, including infection prevention and control. Everything possible must be done to avoid a further spread of the deadly virus.”

The new EU funding will be allocated through the World Health Organisation. It will strengthen the coordination, surveillance and response capacities to Ebola in high-risk districts in Burundi, close to the border with the Democratic Republic of Congo. This new funding complements the existing financial support to the ongoing EU efforts in Ebola surveillance and awareness-raising via NGOs and UN.

Background

Since 2018, the EU has provided €47 million to humanitarian partners in the Democratic Republic of Congo involved in the Ebola response in the affected areas as well as in high-risk areas. In parallel, the EU has also been supporting Ebola prevention and preparedness measures in the neighbouring countries most at risk – Uganda, South Sudan, Rwanda and Burundi – with over €4 million in humanitarian aid to ensure rapid detection and treatment in case of spill-over.

Supporting Ebola preparedness in neighbouring countries is crucial in this region with the high mobility and considerable cross-border trade. Uganda has recently witnessed three cases of a family returning from an Ebola-affected area in the Democratic Republic of Congo. No Ebola cases have been detected in Burundi, but the threat has become increasingly real with two newly confirmed cases in the Democratic Republic of Congo’s province of South Kivu, which shares a border with Burundi.

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RescEU assets mobilised to help Greece fight devastating forest fires

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Following a request for assistance from Greece on 13 August 2019, rescEU assets have been mobilised to tackle forest fires ravaging several areas of Greece. As an immediate response, the European Union has already helped to mobilise 3 forest fighting planes from rescEU reserve from Italy and Spainto be dispatched swiftly to the affected regions.

rescEU is the EU’s strengthened EU Civil Protection Mechanism, whose reserve includes firefighting planes and helicopters. Through rescEU, the EU reinforces its collective ability to respond to disasters that affect European countries. This is the first ever deployment of the rescEU assets.

Commissioner for Humanitarian Aid and Crisis Management Christos Stylianides said: “The EU stands in full solidarity with Greece at this difficult time. The planes are already in action, fighting the fires. This immediate response proves the added value of rescEU which makes our response more robust, quick and efficient. Moreover, this is a real example of the common European values on which rescEU is based: solidarity and protection of lives of our European citizens. I am thankful to Italy and Spain for their offers of assistance. We stand ready to provide further assistance.”

Commissioner Stylianides is in constant communication with the Greek authorities. Today, the Commissioner is in Athens where he met with Prime Minister Kyriakos Mitsotakis and visited the Crisis Centre of the Greek Civil Protection to be briefed along with the Minister for the Protection of Citizens Michalis Chrysochoidis and oversee the operation of the rescEU assets.

The European satellite mapping system Copernicus is helping to provide damage assessment maps of the affected areas.

Background

The EU Civil Protection Mechanism strengthens cooperation between Member States/Participating States in the field of civil protection, with a view to improving prevention, preparedness and response to disasters. Through the Mechanism, the European Commission plays a key role in coordinating the response to disasters in Europe and beyond.

When the scale of an emergency overwhelms the response capabilities of a country, it can request assistance via the Mechanism. Once activated, the Mechanism coordinates assistance made available by its Member States/Participating States through spontaneous offers. In addition, the EU has created the European Civil Protection Pool to have a critical number of readily available civil protection capacities allowing for a stronger and coherent collective response. Should the emergency require additional, life-saving assistance, the new rescEU reserve can be used as a matter of last resort.

To date, all EU Member States participate in the Mechanism, as well as Iceland, Norway, Serbia, North Macedonia, Montenegro, and Turkey. Since its inception in 2001, the EU Civil Protection Mechanism has responded to more than 300 requests for assistance inside and outside the EU.

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EU mobilises €9 million to tackle the food crisis in Haiti

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The European Union has released €9 million in humanitarian aid in response to the deteriorating food and nutrition situation in Haiti. The humanitarian aid will cover the basic food and nutritional needs of more than 130,000 people living in the worst affected areas.

For the EU, the humanitarian situation in Haiti is not a forgotten crisis We are committed to providing vital support to the people hit by the food and nutrition crisis in the country. This assistance comes on top of the €12 million allocated in 2018 to address the urgent food and nutrition needs of Haitians,’ said Commissioner for Humanitarian Aid and Crisis Management, Christos Stylianides.

The funds provided will benefit families living in the areas worst affected by the crisis and children suffering from acute malnutrition. Life-saving nutritional support will also be provided to over 5,000 children under the age of 5 who are suffering from acute malnutrition. In parallel, the EU will back measures to strengthen the analysis of the food situation and to improve the quality of the humanitarian response.

The European Commission’s humanitarian assistance pays special attention to victims of forgotten crises, i.e. severe, protracted humanitarian crises where the people affected do not receive sufficient international aid, as is the case in Haiti. Haiti is the main beneficiary of the European Commission’s humanitarian aid to Latin America and the Caribbean, having received €404 million in support since 1994.

Background

Due to its vulnerability to natural hazards and its high levels of poverty, Haiti has limited capacity to cope with recurring emergencies such as earthquakes, hurricanes, and prolonged droughts.

In recent months, the humanitarian situation in Haiti has deteriorated dramatically and the country is facing serious food shortages. Between 2018 and 2019, the number of people in crisis situations or facing food emergencies doubled to 2.6 million, i.e. 25 % of the population. Furthermore, the prevalence of acute malnutrition among children under the age of five remains high, and above World Health Organization (WHO) emergency levels in several locations, including the Nord-Ouest department.

€3 million were earmarked at the end of July 2019 for disaster risk reduction.

In Haiti, particular emphasis is being placed on establishing an effective link between relief, rehabilitation and development (LRRD) to facilitate the transition between emergency relief work and structural development assistance in the country. More specifically, in terms of development cooperation, the amount of EU funding allocated to Haiti is the highest in the region, standing at €420 million for the period 2014-2020. These funds are intended to support development and the fight against poverty in the country by focusing on four key sectors: strengthening and modernising public administration, education, urban development and infrastructure, and food and nutrition security.

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