Today’s decision by the European Commission to provisionally apply the EU–Mercosur Interim Trade Agreement marks a decisive step towards implementation after quarter of a century of negotiations.
We, the 25 undersigned European business associations representing a broad range of businesses across the European Union (EU), fully support this essential step forward as an important booster for our competitiveness.
The economic case for the FTA is crystal clear. According to the European Commission’s own estimates, once fully implemented, the Agreement will increase EU exports to Mercosur by nearly 40%, generating €48.7 billion in additional annual exports and €77.6 billion in annual EU GDP gains by 2040[1]. These figures translate into expanded market access for European companies, strengthened transatlantic value chains, and tangible growth opportunities in a market of more than 270 million consumers.
At the same time, the cost of years of delay has been profound. European businesses were estimated to be losing out on €3 billion in exports for every month the Agreement remained stalled[2]. Those losses have already accumulated significantly, weakening Europe’s competitive position in the world, eroding market share, and postponing investment decisions that were taken elsewhere. As a result, since the Agreement was expected to enter into force in 2021, the European economy has already missed out on €291 billion in GDP growth – effectively the size of Portugal’s entire annual economic output.
In an increasingly competitive and fragmented global landscape, the EU-Mercosur Agreement is a major advantage. The swift operationalisation of the Agreement allows European companies to secure a first-mover advantage in the region. The Agreement offers a unique opportunity to diversify our trade relationships and improve access to essential inputs and raw materials. It is a modern, balanced and rules-based partnership. It broadly eliminates tariffs, reduces non-tariff barriers, and anchors binding commitments on sustainability, labour rights and environmental protection, reinforcing the EU’s role as a global standard-setter.
With ratifications advancing and provisional application, European businesses can now engage, invest and expand with greater certainty. It is essential that this momentum is maintained.
After 25 years of negotiations, Europe must now ensure that this partnership delivers in practice.
[1] Economic Analysis of the Negotiated Outcome of the EU-Mercosur Partnership Agreement, European Commission
[2] Time is Money: The Cost of Delaying the Ratification of the EU-Mercosur Trade Agreement, ECIPE
List of Signatories:
