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Towards the Strategic Partnership Trade Agreement Between EU - Mercosur
Last week a significant progress was made in the strategic collaboration commercial agreement between the European Union (EU) and the Common Market of the South (Mercosur). In times when world trade appears dominated by protectionist tensions between the United States and China, the European and Latin American supranational bodies seem willing to put to good use the auspicious agreement on which they have been working for almost 20 years with the idea of releasing considerably the markets integrating the regional economies of the nations that make up each block.
Although the fine print and legislative ratifications of each state are still in the negotiation stage, the Argentine state hopes that the sealed agreement will have the first benefits for the agro-industrial producers in the tariff reductions. In this sense, the Argentine Ministry of Production issued a document emphasizing the greatest benefits of the agreement, such as the lowering of tariffs for primary and industrial goods, the fixing of quotas and the promotion of a serious and substantial change in economic variables, normative and institutional for our country.
For Argentina to be competitive against the remaining Latin American members of its bloc (Brazil, Uruguay and Paraguay) and to reap the economic successes of the agreement in the future, it has set to work on improving its basic macroeconomic issues, reducing the inflation, tax pressure and labor and logistics costs.
The possibility of attracting investments with the future evolution of the agreement for companies exporting goods and services is also mentioned.
Although there are specific fears within a given commercial sector of both blocs that economic liberalization of this magnitude generates, the supranational authorities have come out to give a message of calm, conveying the common intention of gradually agreeing with each commercial sector involved. There are issues such as intellectual property, rules of origin, sustainability, labor and environmental issues whose evolution will have to pay special attention to the large differences that exist between the regulations of both parties.
The agreement will create a mechanism for the settlement of commercial disputes that should give predictability to economic operators, increasing reciprocal investment opportunities by encouraging exports.
The modality of elimination and reduction of tariffs (some immediate and others of progressive reduction) opens opportunities for the exchange of goods and services that will improve competition for the benefit of consumers on both sides of the ocean. In Argentina, the high competitiveness of the agricultural sector places it as a great beneficiary of the agreement.
We hope that the authorities and the different economic actors involved will bring to a successful conclusion the negotiations, transformations and agreements that are necessary to make the way forward beneficial for all consumers.
Pablo M. Semenzato practice has been focused for more than ten years in commercial and corporate matters, civil and commercial litigation, arbitration, capital reorganizations, advising both individual and corporate clients, with commercial industry, construcction - real state, family and shareholder problems, as main areas of practice.