August 2019

The new EU-Mercosur Agreement only superficially rejects protectionism. As much as it liberalises trade, it also protects European defensive interests and extends the EU’s regulatory influence, to the detriment of Mercosur producers and European consumers.

The reductions in trade barriers have been selective, avoiding major EU defensive interests like agricultural goods and geographical indicators. European consumers will forego the benefits of freer trade in these areas.

By promoting the EU’s regulatory standards and competition law, the agreement privileges European firms, limiting competition from Mercosur firms while slowing innovation and likely reducing growth, as a result.

The agreement is positive on public procurement, subsidies and state-owned enterprises. It also contains standard provisions for sustainable development, transparency and dispute settlement, and promises cooperation in fields such as animal welfare.