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EU and Mercosur agree huge trade deal after 20-year talks | |
(32 minutes later) | |
The EU and South American economic bloc Mercosur have clinched a huge trade deal after 20 years of negotiations. | |
EU Commission chief Jean-Claude Juncker said it was the EU's biggest deal to date and, at a time of trade tensions between the US and China, showed that "we stand for rules-based trade". | EU Commission chief Jean-Claude Juncker said it was the EU's biggest deal to date and, at a time of trade tensions between the US and China, showed that "we stand for rules-based trade". |
Brazil's President Jair Bolsonaro said it was "historic" and "one of the most important trade deals of all time". | Brazil's President Jair Bolsonaro said it was "historic" and "one of the most important trade deals of all time". |
Mercosur consists of Argentina, Brazil, Uruguay and Paraguay. | Mercosur consists of Argentina, Brazil, Uruguay and Paraguay. |
Venezuela is also a member but it was suspended in 2016 for failing to meet the group's basic standards. | |
The deal aims to cut or remove trade tariffs, making imported products cheaper for consumers while also boosting exports for companies on both sides. | |
The two parties began negotiating in 1999 but talks accelerated after US President Donald Trump's election in 2016, which led to the freezing of EU-US talks over a possible deal. | The two parties began negotiating in 1999 but talks accelerated after US President Donald Trump's election in 2016, which led to the freezing of EU-US talks over a possible deal. |
The EU has also concluded trade agreements with Canada, Mexico and Japan since Mr Trump's election. | The EU has also concluded trade agreements with Canada, Mexico and Japan since Mr Trump's election. |
However, the EU deal with Mercosur could see savings on tariffs that are four times as big as those made in the Japan deal, EU trade commissioner Cecilia Malmstrom said. | |
What is the reaction? | |
Ms Malmstrom said negotiations had begun 20 years ago to the day. | Ms Malmstrom said negotiations had begun 20 years ago to the day. |
"They have been long negotiations - tough, difficult, and at least I have said many times 'we are almost there'. Now we are. This is a landmark agreement," Ms Malmstrom said. | "They have been long negotiations - tough, difficult, and at least I have said many times 'we are almost there'. Now we are. This is a landmark agreement," Ms Malmstrom said. |
She said it sent a strong message that both the EU and Mercosur were in favour of "open, sustainable and rules-based trade". | She said it sent a strong message that both the EU and Mercosur were in favour of "open, sustainable and rules-based trade". |
Meanwhile Argentine President Mauricio Macri tweeted the tearful audio message in which his Foreign Minister Jorge Faurie told him: "In your presidency we have successfully concluded 20 years of negotiations." | |
Speaking to reporters, Mr Faurie said Mercosur had hitherto been a "very closed commercial space" but that the deal with the EU sent a "very clear message about where we are going". | |
Argentina's Secretary of International Relations Horacio Reyser said the agreement would create a market for goods and services covering 800 million consumers. | Argentina's Secretary of International Relations Horacio Reyser said the agreement would create a market for goods and services covering 800 million consumers. |
It would boost GDP, create jobs and attract investment, he said. | |
He tweeted a video of the moment the deal was confirmed. | |
However, the environmental group Greenpeace said the deal - and the likely growth in demand for Latin American agricultural products - amounted to a "disaster for the environment on both sides of the Atlantic". | |
Ahead of the deal's announcement, it said the agreement would lead to more destruction of the Amazon rainforest and attacks on indigenous peoples. | |
Cattle farming is already the biggest driver of deforestation, Greenpeace says. | |
Critics say Mr Bolsonaro's plans to weaken environmental protections also threaten the Amazon. | |
What's in the deal? | What's in the deal? |
The EU is already Mercosur's biggest trade and investment partner and its second largest for trade in goods, Reuters reports. | The EU is already Mercosur's biggest trade and investment partner and its second largest for trade in goods, Reuters reports. |
The EU wants to increase access for firms that make industrial products and cars - which are currently subject to tariffs of up to 35% - and also enable them to compete for public contracts in Mercosur countries. | |
Mercosur wants to increase exports of beef, sugar, poultry and other farm products. | Mercosur wants to increase exports of beef, sugar, poultry and other farm products. |
In a statement, Brazil said the deal included eliminating tariffs on products such as orange juice, instant coffee and fruit. | In a statement, Brazil said the deal included eliminating tariffs on products such as orange juice, instant coffee and fruit. |
Meanwhile, producers of other products such as meat, sugar and ethanol would have greater access to the EU market through quotas, the statement said. | Meanwhile, producers of other products such as meat, sugar and ethanol would have greater access to the EU market through quotas, the statement said. |
How other complex deals compare |