Spain eyes launch of EU-Mercosur trade deal

Today, Spain is Brazil’s fifth-largest export market. The Iberian nation held a 2.9% share of Brazilian exports in 2022, the highest percentage since the start of the historical series in 1997. With a focus on soy, corn, and crude petroleum oils, Spain’s participation percentage increased by one percentage point compared to 2021. However, according to Xiana Méndez, secretary of Spain’s commerce and head of ICEX España Exportación e Inversiones, this scenario could turn more auspicious if Mercosur and the European Union had their free trade agreement in place.

This is due to the fact that, according to her, such a deal would make trade more cost-effective as it allows for a decrease in tariffs and includes facilitation instruments like tariff barriers and the harmonization of sanitary and phytosanitary rules. “These features help our companies in their search for new suppliers. I think diversification is the best course of action, as we’ve seen in situations like the pandemic and the [Ukraine] war,” she went on.

Top 10 exports to Spain | Jan 2023 -Feb 2023 | TEUs

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In Brazil for the 2023 Spain-Brazil Business Gathering, Xiana said that the agreement now depends on a consensus around the protocol on sustainable development that sets obligations for both parties and monitoring mechanisms. She expects this to be achieved by mid-year.

The secretary’s mission is tough. Spain will occupy the rotating presidency of the Council of the European Union in the second half of the year, when it will hold the Community of Latin American and Caribbean States (Celac)-EU Summit, scheduled for July, and intends to get off grounds the free trade agreements with Chile, Mexico, and Mercosur.

The agreement is being worked to exhaustion by Xiana, who recently toured the Mercosur countries to untie knots around it.

In addition to promoting bilateral exchanges in the trade arena, she added, the agreement would be essential to boost both sides’ environmental agendas.

“The lack of an agreement is inherently a worse option for the society and the environment. The agreement’s chapter on sustainable development reinforces the EU and Mercosur’s international commitments to reduce CO2 emissions, protect ecosystems like the Amazon, and involve indigenous people in value chains and agriculture.”

When asked about the reservations of the Argentine and Brazilian governments, as well as the rejection of a segment of public opinion that fears job losses as European products enter the Latin American market, she stated that the treaty would stimulate job creation.

“Import and export expose companies to international competition, make them more innovative, force them to grow, to be more productive. Living in a closed economy means that productivity never takes off and competitiveness does not take off. So international trade is a source of growth and job creation,” she said.

She argued that the agreement brings a balanced liberalization in general terms, “but it would be more immediate for Mercosur products in the European Union than the other way around.”

According to her, the agreement is expected to boost the primary sector in Brazil by increasing agricultural and manufactured goods exports.

“In the case of industrial goods, there is a zero to ten years timetable for liberalization of more than 90% of goods for the European Union market. There is also the possibility of exporting industrial goods to the European market, which is quite open and has lower tariffs than Mercosur,” she said. “More than trade liberalization, liberalization will enable Brazilian or Argentine industry to obtain semi-manufactured equipment, goods, and other necessary inputs at significantly lower prices.”

Source: Valor Econômico

To read the original news article, go to: https://valor.globo.com/brasil/noticia/2023/03/31/espanha-quer-dar-impulso-em-acordo-entre-ue-e-mercosul.ghtml

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