After years of negotiations, finally on 28 June, the free trade agreement between the EU and Mercosur was signed, creating a market made up by 780 million people and allowing companies doing business on both sides to save 4 billion euros in duties.

Among the sectors that will benefit the most from the agreement is European footwear which, up until today, paid duties of around 35% for its entry into South America, Now, even if it is not the very best time for international trade, the expectation is that in the wake of the agreement, Made in Europe and especially Made in Italy will experience a great boost in their exports.

The EU is the first to sign a business pact with Mercosur, a trade bloc made up by Argentina, Brazil, Paraguay and Uruguay that affects a consumer base of 780 million people, with close political and economic ties cemented between the EU and the countries of Mercosur. In addition to the commercial code and the opening up to markets with great potential, the agreement implements a series of regulations regarding shared standards of safety for consumers, environmental sustainability, and workers’ rights, as well as complete compliance with the Paris Agreement on climate change.

During a moment when trade tensions and tariff wars are the order of the day, the EU-Mercosur agreement sends a strong message in countertrend to this scenario: “I choose my words with great care when I say that this is a historic moment – declared Jean-Claude Junker, President of the European Commission – In the midst of international trade tensions, today we are sending a strong message, together with our partners of Mercosur, that we support business relations that are based on rules. Through this pact, the countries of Mercosur decided to open their markets up to Europe. This is obviously great news for businesses, workers, and the economies on both sides of the Atlantic, allowing for a savings of over 4 billion euros in customs duties annually, and making it the biggest trade agreement every signed by the EU”.

“Today’s agreement brings Europe and South America together in a spirit of cooperation and openness – adds Cecilia Malmström – Coming into force, it will create a market of 780 million people, offering enormous opportunities to European businesses and workers in countries with which we have strong historic ties and where the markets have more or less remained closed to us up until now. The agreement will allow European companies to save around 4 billion euros in duties – four times more than what is saved in the agreement signed with Japan – giving them an advantage over competitors in other parts of the world. It also creates high standards and establishes a strong connection to shared themes like the environment and workers’ rights, while reinforcing at the same time the commitment to sustainable development as called for in the Paris Agreement for example”.