The EU and South American economic bloc Mercosur – comprising Argentina, Brazil, Uruguay and Paraguay – have concluded talks on a trade deal following 20 years of negotiations, a move that should result in new business opportunities in textiles, clothing and footwear.
Once in place, the EU-Mercosur Free Trade Agreement will, over time, remove duties on 91% of goods that EU companies export to the South American economic bloc – with Mercosur countries removing duties of up to 35% on clothing and leather shoes, and up to 26% on knitted fabrics. It will also eliminate import duties on 92% of Mercosur goods exported to the EU.
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Covering a population of nearly 800m people, the free trade agreement is the largest ever concluded by the EU, covering a population of 780m. According to the EU, the pact will save European companies over EUR4bn in duties.
Euratex, the European Apparel and Textile Confederation, welcomed the conclusion of negotiations. The body has been actively campaigning to ensure an agreement fit for textile and clothing companies, also preserving social and environmental standards in the manufacturing of high-quality products.
“Despite a challenging trade environment, we are glad rules-based trade has prevailed,” says Alberto Paccanelli, Euratex president. “In 2018 EU exports of textile and clothing products to Mercosur were EUR460m and the elimination of tariffs will open further business opportunities for our sector. We look forward to a swift approval by the European Council and the European Parliament.”
The new trade framework is part of a wider Association Agreement between the two regions. Next steps will see both sides 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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