EU-South American free trade pact

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Massive EU-South American free trade pact would reduce tariffs, but some farmers are opposed After more than 20 years of negotiations, the 27-nation European Union and Mercosur — a South American trade bloc of Brazil, Argentina, Paraguay, Uruguay and Bolivia — are still trying to finalize a major trade agreement that is sparking protests by European farmers. Read more.

Key points: The deal aims to create one of the largest free trade zones in the world, covering over 700 million people and nearly 25% of global GDP. Much like the U.S.-Mexico-Canada free trade agreement, its goal is to reduce tariffs and trade barriers, making it easier for businesses on both sides to export goods.   European farmers, especially in France, worry that an influx of South American products would saturate their markets, undercutting local agriculture. One year after a massive European farmers’ protest movement, another round of protests has erupted across the continent, with many claiming that reduced tariffs or duty-free quotas for South American products could be fatal for them.   In South America, leaders like Brazilian President Luiz Inácio Lula da Silva view the agreement as a boost for regional trade and economic growth. The deal is also backed by industries in both regions. European carmakers and pharmaceutical companies see it as a way to access Mercosur’s growing markets.

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