In a joint letter to Chancellor Merkel, Brazilian President Temer, EU Commissioner Malmström and Mercosur negotiator Csukasi, the LADW, the Federation of German Industries (BDI) and the Brazilian Federation of Industries (CNI) have advocated greater speed and willingness to compromise in the free trade agreement negotiations between the EU and Mercosur.

“The European Union and Mercosur member states have a unique opportunity to reach an agreement that will set a course for prosperous future economic relations,” according to said document. For these three organisations, current developments are threatening the entire system of the World Trade Organisation (WTO). In the light of this, the treaty is of even greater strategic significance.

The letter specifically details that: “Both sides are called upon to compromise on the few remaining points of contention, such as transitional periods in the reduction of customs duties on certain EU industrial goods, import quotas for Mercosur agricultural products, and protected appellations of origin. Individual interests must not stand in the way of the conclusion of a balanced agreement and the far-reaching benefits that this treaty could offer to the peoples and economy of both parties.”

German industry emphatically supports such an agreement. According to the Commission, the EU is Mercosur’s largest trading partner and foreign investor. An agreement between two of the five largest economic powers in the world would be a sign of open, rule-based trade, particularly in times of rising protectionism. The dismantling of tariff and non-tariff trade barriers would give the economic area that is home to some eight hundred million people the growth-impetus that both sides so urgently require. The savings for EU exporters alone from the abolition of tariffs are estimated at four billion euros per annum.

Further Information

EU Commission overview of the negotiations

Facts and figures on the agreement