Understand the main points of the historic agreement between Mercosur and the European Union
Understand the main points of the historic agreement between Mercosur and the European Union .      Areas such as agriculture, the environment, and government procurement have stalled the negotiations in recent months The historic agreement between Mercosur and the European Union, announced on Friday during the leaders' summit in Uruguay, addresses key issues that had stalled negotiations in recent months. These include rules on government procurement and environmental concerns, areas where Brazilian diplomacy claimed significant victories. Here are the main points of the agreement.
Lula: Brazil managed to 'preserve interests' in Mercosur-EU agreement
Criticism: Milei calls Mercosur a "prison" for member countries
Government procurement
Brazilian diplomacy succeeded in ensuring that the agreement between Mercosur and the European Union allows the use of state procurement as a tool to
Jornal O Globo
The historic agreement between Mercosur and the European Union, announced on Friday during the leaders' summit in Uruguay, addresses key issues that had stalled negotiations in recent months. These include rules on government procurement and environmental concerns, areas where Brazilian diplomacy claimed significant victories. Here are the main points of the agreement.

Government procurement

Brazilian diplomacy succeeded in ensuring that the agreement between Mercosur and the European Union allows the use of state procurement as a tool to boost Brazilian industry. Broadly, the aim is to make external purchases more difficult so that the government prioritizes domestic companies. Among the measures announced on Friday is the exclusion of purchases related to the Unified Health System (SUS) from the agreement.

As a result, the Brazilian government is prohibited from purchasing items for the SUS from other countries. This exclusion was described as "complex." The government views state procurement as an "instrument for economic and industrial development," and therefore requested a revision of this part of the agreement to ensure this tool remains an economic and industrial driver.

This was one of the clauses that had stalled progress in negotiations throughout the year but ended in a victory for Brazilian diplomacy.

Regarding government procurement, the text preserves the possibility of technological orders, considered a policy to promote innovation; eliminates temporal restrictions on the use of technological and commercial offsets; maintains space for policies supporting micro and small enterprises and family farming; and preserves preference margins for national products and services.

The European Union highlights that the agreement will "make it easier for European companies to compete for government contracts in Mercosur countries on equal footing with local companies," simplifying and reducing "discriminatory" barriers for foreign companies in bidding processes.

Environment

Another sticking point was the clause on environmental requirements imposed by the European Union. The final agreement enhances commitments to environmental and economic goals but rejects "unnecessary trade barriers." Both blocs agreed on a series of commitments to environmental protection and the promotion of decent work.

Brazil was concerned about environmental issues due to fears that Europe's new anti-deforestation law might be used to hinder the entry of Brazilian products into the EU. This part of the agreement serves as a safeguard against unilateral measures perceived as protectionist.

In english: Read more stories on O GLOBO's website

The European Union emphasizes that both blocs agreed to uphold existing climate and environmental standards, prohibiting the undue encouragement of trade and investments that violate environmental laws. The agreement also includes commitments on sustainable fishing and forest management, in addition to implementing the Paris Agreement.

Automobiles

The agreement will eliminate import taxes on more than 91% of EU products exported to Mercosur. For car parts, Mercosur's tax on these items ranges from 14% to 18%.

The Brazilian government highlighted that flexible conditions regarding tariff issues apply to electrified vehicles and new technology vehicles, even those not yet commercially available.

For electrified vehicles, tax elimination will occur over 18 years. For hydrogen vehicles, the period will be 25 years, with a six-year grace period. For new technologies, 30 years, with a six-year grace period.

A safeguard for investments in the automotive sector was also established to preserve and expand automotive investments.

This means that if an increase in European imports harms the industry, Brazil may suspend the tax elimination schedule for the entire sector or reinstate the applicable rate to other origins (currently 35%) for a period of three years, renewable for another two years, without needing to offer compensation to the European Union.

Agribusiness

In this area, the European Union states that its agricultural communities will have easier access to the Mercosur market, as well as the opportunity to sell their products to consumers in the other group.

Mercosur has significant potential for consuming products like wine, cheese, and chocolate. The agreement will remove tariffs and other trade barriers.

This was one of the most critical points of the agreement due to obstacles imposed by the French government. President Emmanuel Macron faced intense pressure from farmers due to potential competition with agricultural products from Brazil and Argentina, primarily.
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2024-12-08
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     Areas such as agriculture, the environment, and government procurement have stalled the negotiations in recent months The historic agreement between Mercosur and the European Union, announced on Friday during the leaders' summit in Uruguay, addresses key issues that had stalled negotiations in recent months. These include rules on government procurement and environmental concerns, areas where Brazilian diplomacy claimed significant victories. Here are the main points of the agreement.
Lula: Brazil managed to 'preserve interests' in Mercosur-EU agreement
Criticism: Milei calls Mercosur a "prison" for member countries
Government procurement
Brazilian diplomacy succeeded in ensuring that the agreement between Mercosur and the European Union allows the use of state procurement as a tool to boost Brazilian industry. Broadly, the aim is to make external purchases more difficult so that the government prioritizes domestic companies. Among the measures announced on Friday is the exclusion of purchases related to the Unified Health System (SUS) from the agreement.
As a result, the Brazilian government is prohibited from purchasing items for the SUS from other countries. This exclusion was described as "complex." The government views state procurement as an "instrument for economic and industrial development," and therefore requested a revision of this part of the agreement to ensure this tool remains an economic and industrial driver.
This was one of the clauses that had stalled progress in negotiations throughout the year but ended in a victory for Brazilian diplomacy.
Regarding government procurement, the text preserves the possibility of technological orders, considered a policy to promote innovation; eliminates temporal restrictions on the use of technological and commercial offsets; maintains space for policies supporting micro and small enterprises and family farming; and preserves preference margins for national products and services.
The European Union highlights that the agreement will "make it easier for European companies to compete for government contracts in Mercosur countries on equal footing with local companies," simplifying and reducing "discriminatory" barriers for foreign companies in bidding processes.
Environment
Another sticking point was the clause on environmental requirements imposed by the European Union. The final agreement enhances commitments to environmental and economic goals but rejects "unnecessary trade barriers." Both blocs agreed on a series of commitments to environmental protection and the promotion of decent work.
Brazil was concerned about environmental issues due to fears that Europe's new anti-deforestation law might be used to hinder the entry of Brazilian products into the EU. This part of the agreement serves as a safeguard against unilateral measures perceived as protectionist.
In english: Read more stories on O GLOBO's website
The European Union emphasizes that both blocs agreed to uphold existing climate and environmental standards, prohibiting the undue encouragement of trade and investments that violate environmental laws. The agreement also includes commitments on sustainable fishing and forest management, in addition to implementing the Paris Agreement.
Automobiles
The agreement will eliminate import taxes on more than 91% of EU products exported to Mercosur. For car parts, Mercosur's tax on these items ranges from 14% to 18%.
The Brazilian government highlighted that flexible conditions regarding tariff issues apply to electrified vehicles and new technology vehicles, even those not yet commercially available.
For electrified vehicles, tax elimination will occur over 18 years. For hydrogen vehicles, the period will be 25 years, with a six-year grace period. For new technologies, 30 years, with a six-year grace period.
A safeguard for investments in the automotive sector was also established to preserve and expand automotive investments.
This means that if an increase in European imports harms the industry, Brazil may suspend the tax elimination schedule for the entire sector or reinstate the applicable rate to other origins (currently 35%) for a period of three years, renewable for another two years, without needing to offer compensation to the European Union.
Agribusiness
In this area, the European Union states that its agricultural communities will have easier access to the Mercosur market, as well as the opportunity to sell their products to consumers in the other group.
Mercosur has significant potential for consuming products like wine, cheese, and chocolate. The agreement will remove tariffs and other trade barriers.
This was one of the most critical points of the agreement due to obstacles imposed by the French government. President Emmanuel Macron faced intense pressure from farmers due to potential competition with agricultural products from Brazil and Argentina, primarily.
The translation of this text into english was carried out by Project Irineu, O GLOBO's initiative to develop artificial intelligence tools. Here is the link to the original report.
Understand the main points of the historic agreement between Mercosur and the European Union