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EU and #Mercosur reach agreement on trade

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The European Union and Mercosur have reached a political agreement for an ambitious, balanced and comprehensive trade agreement
. The new trade framework - part of a wider Association Agreement between the two regions – will consolidate a strategic political and economic partnership and create significant opportunities for sustainable growth on both sides, while respecting the environment and preserving interests of EU consumers and sensitive economic sectors.

The EU is the first major partner to strike a trade pact with Mercosur, a bloc comprising Argentina, Brazil Paraguay and Uruguay. The agreement concluded today will cover a population of 780 million and cement the close political and economic relations between the EU and Mercosur countries. It represents a clear commitment from both regions to rules based international trade and will give European companies an important head start into a market with an enormous economic potential. It will anchor important economic reforms and modernisation undergoing in Mercosur countries. The agreement upholds the highest standards of food safety and consumer protection, as well as the precautionary principle for food safety and environmental rules and contains specific commitments on labour rights and environmental protection, including the implementation of the Paris climate agreement and related enforcement rules.

European Commission President Jean-Claude Juncker said: “I measure my words carefully when I say that this is a historical moment. In the midst of international trade tensions, we are sending today a strong signal with our Mercosur partners that we stand for rules-based trade. Through this trade pact, Mercosur countries have decided to open up their markets to the EU. This is obviously great news for companies, workers and the economy on both sides of the Atlantic, saving over €4 billion worth of duties per year. This makes it the largest trade agreement the EU has ever concluded. Thanks to the hard and patient work of our negotiators, this is matched with positive outcomes for the environment and consumers. And that's what makes this agreement a win-win deal.”

Trade Commissioner Cecilia Malmström added: "Today's agreement brings Europe and South America closer together in a spirit of cooperation and openness. Once this deal is in place, it will create a market of 780 million people, providing enormous opportunities for EU businesses and workers in countries with whom we have strong historical links and whose markets have been relatively closed up to now. The agreement will save European companies over €4bn in duties at the border – four times as much as our deal with Japan – whilst giving them a head start against competitors from elsewhere in the world. It also sets high standards and establishes a strong framework to jointly address issues like the environment and labour rights, as well as reinforcing sustainable development commitments we have already made, for example under the Paris Agreement. Over the past few years the EU has consolidated its position as the global leader in open and sustainable trade. Agreements with 15 countries have entered into force since 2014, notably with Canada and Japan. This agreement adds four more countries to our impressive roster of trade allies.”

Agriculture and Rural Development Commissioner Phil Hogan said: “The EU-Mercosur agreement is a fair and balanced deal with opportunities and benefits on both sides, including for Europe's farmers. Our distinctive, high quality EU agri-food products will now get the protection in Mercosur countries that they deserve, supporting our market position and growing our export opportunities. Today's agreement also presents some challenges to European farmers and the European Commission will be available to help farmers meet these challenges. For this agreement to be a win-win, we will only open up to agricultural products from Mercosur with carefully managed quotas that will ensure that there is no risk that any product will flood the EU market and thereby threaten the livelihood of EU farmers.”

Main features of the EU-Mercosur trade agreement

The EU-Mercosur region-to-region agreement will remove the majority of tariffs on EU exports to Mercosur, making EU companies more competitive by saving them €4 billion worth of duties per year.

  • As regards EU industrial sectors, this will help boost exports of EU products that have so far been facing high and sometimes prohibitive tariffs. Those include cars (tariff of 35%), car parts (14-18%), machinery (14-20%), chemicals (up to 18%), pharmaceuticals (up to 14%), clothing and footwear (35%) or knitted fabrics (26%).
  • The EU agri-food sector will benefit from slashing existing Mercosur high tariffs on EU export products, chocolates and confectionery (20%), wines (27%), spirits (20 to 35%), and soft drinks (20 to 35%). The agreement will also provide duty-free access subject to quotas for EU dairy products (currently 28% tariff), notably for cheeses.

Mercosur countries will also put in place legal guarantees protecting from imitation 357 high-quality European food and drink products recognised as Geographical Indications (GIs), such as Tiroler Speck (Austria), Fromage de Herve (Belgique), Münchener Bier (Germany), Comté (France), Prosciutto di Parma (Italy), Polska Wódka (Poland), Queijo S. Jorge (Portugal), Tokaji (Hungary) or Jabugo (Spain).

The agreement will open up new business opportunities in Mercosur for EU companies selling under government contracts, and to service suppliers in the information technology, telecommunications and transport sectors, among others. It will simplify border checks, cut red tape and limit the use of export taxes by Mercosur countries. Smaller companies on both sides will also benefit thanks to a new online platform providing easy access to all relevant information.

While delivering significant economic benefits, the agreement also promotes high standards. The EU and Mercosur commit to effectively implement the Paris Climate Agreement. A dedicated sustainable development chapter will cover issues such as sustainable management and conservation of forests, respect for labour rights and promotion of responsible business conduct. It also offers civil society organisations an active role to overview the implementation of the agreement, including any human rights, social or environmental concerns. The agreement will also provide for a new forum to work closely together on a more sustainable approach to agriculture and, as part of the political dialogue under the Association Agreement, address the rights of indigenous communities. The agreement also safeguards the EU and Mercosur's right to regulate in the public interest and preserves the right to organise public services in the way they consider appropriate.

EU food safety standards will remain unchanged and all imports will have to comply with the EU's rigorous standards, as is the case today. The agreed food safety, and animal and plant health provisions will reinforce cooperation with the authorities of the partner countries and speed up the flow of information about any potential risks through a more direct and efficient information and notification system. In this way, the agreement will increase our efficiency in ensuring the safety of the products traded between the EU and Mercosur countries.

The trade agreement reached today is part of a comprehensive new Association Agreement under negotiation between the EU and Mercosur countries. It is composed of a political and cooperation pillar – on which negotiators already reached a general agreement in June 2018 in Montevideo – and the trade pillar. Beyond trade, the agreement will enhance political dialogue and increase cooperation in areas such as migration, digital economy, research and education, human rights, including the rights of indigenous people, corporate and social responsibility, environment protection, ocean governance, as well as fight against terrorism, money laundering and cybercrime. It will also offer increased possibilities for cooperation at multilateral level. The Association Agreement will complete the network of Association Agreements in the Americas and consolidate the relations with the important partners in the region, supporting EU positions on many global issues.

Another milestone trade agreement concluded by the Juncker Commission

Agreement Population

covered

Trade in goods Trade in services Tariff savings
for EU companies
Joint GDP
Canada 550 million €72 billion €35 billion €0.6 billion €18 trillion
Japan 639 million €135 billion €53 billion €1 billion €21 trillion
Mercosur 773 million €88 billion €34 billion Over €4 billion €19 trillion

Next steps

Both sides will now perform a legal revision of the agreed text to come up with the final version of the Association Agreement and all its trade aspects. The Commission will then translate it into all official EU languages and submit the Association Agreement to EU Member States and the European Parliament for approval.

More information

Agreement in principle

MEMO

Questions and answers

Key facts about the agreement

Factsheet on agriculture

Factsheet on food safety

Factsheet on sustainable development

Exporter stories

Dedicated webpages

More on Mercosur

EU

AI rules: What the European Parliament wants

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Find out how MEPs are shaping EU artificial intelligence legislation in order to boost innovation while ensuring safety and protecting civil liberties.

Artificial intelligence (AI) is a major part of the digital transformation. Indeed, it is hard to imagine life without the use of AI in many goods and services, and it is set to bring more changes to the workplace, business, finance, health, security, farming and other fields. AI will also be crucial for the EU's green deal and the COVID-19 recovery.

The EU is currently preparing its first set of rules to manage the opportunities and threats of AI, focusing on building trust in AI, including managing its potential impact on individuals, society and the economy. The new rules also aim to provide an environment in which European researchers, developers and businesses can thrive. The European Commission wants to boost private and public investment in AI technologies to €20 billion per year.

Infographic with facts and figures about artificial intelligence such the number of AI patent applications and the number of jobs that could be created by 2025AI patent applications

Parliament's work on AI legislation

Ahead of a Commission proposal on AI, expected in early 2021, the Parliament has set up a special committee to analyze the impact of artificial intelligence on the EU economy. "Europe needs to develop AI that is trustworthy, eliminates biases and discrimination, and serves the common good, while ensuring business and industry thrive and generate economic prosperity," said the new committee chairman Dragoș Tudorache.

On 20 October 2020, Parliament adopted three reports outlining how the EU can best regulate AI while boosting innovation, ethical standards and trust in technology.

One of the reports focuses on how to ensure safety, transparency and accountability, prevent bias and discrimination, foster social and environmental responsibility, and ensure respect for fundamental rights. "The citizen is at the centre of this proposal," said author of the report Ibán García del Blanco (S&D, Spain).

Axel Voss (EPP, Germany) authored Parliament’s report on a civil liability regime for artificial intelligence. He explains the aim is to protect Europeans while also providing businesses with the legal certainty necessary to encourage innovation. "We're not pushing for revolution. There should be uniform rules for businesses, and existing law should be taken into account," he said.

Regarding intellectual property rights, Parliament stressed the importance of an effective system for further AI development, including the issue of patents and new creative processes. Among the issues to be resolved is the intellectual property ownership of something entirely developed by AI, said report author Stéphane Séjourné (Renew, France).

Parliament is working on a number of other issues related to AI, including:

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EU

2021 Commission work programme: From strategy to delivery

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The Commission has adopted its 2021 work programme, designed to make Europe healthier, fairer and more prosperous, while accelerating its long-term transformation into a greener economy, fit for the digital age. It contains new legislative initiatives across all six headline ambitions of President von der Leyen's Political Guidelines and follows her first State of the Union Speech. While delivering on the priorities set out in this work programme, the Commission will continue to put all its efforts into managing the crisis, and into making Europe's economies and societies more resilient.

European Commission President Ursula von der Leyen said: “Our utmost priority will continue being to save lives and livelihoods threatened by the coronavirus pandemic. We have already achieved a lot. But Europe is not out of the woods yet and the second wave is hitting hard across Europe. We must remain vigilant and step up, all of us. The European Commission will continue its efforts to secure a future vaccine for Europeans and to help our economies recover, through the green and digital transition.”

Interinstitutional Relations and Foresight Vice President Maroš Šefčovič said: “Whilst ensuring Europe can manage the pandemic and its devastating impact, we also continue to draw lessons from the crisis. Therefore, the priorities set out in this work programme will not only help deliver Europe's recovery but also our long-term resilience – through future-proof solutions across all policy areas. For that, we will make the best use of strategic foresight as well as our better law-making principles – evidence-based and transparent, efficient and fit for the future.”

Delivering on EU priorities

The 2021 Commission work programme sees a shift from strategy to delivery across all six political priorities. It confirms the Commission's resolve to lead the twin green and digital transition – an unparalleled opportunity to move out of the fragility of the crisis and create a new vitality for the Union.

  1. A European Green Deal

To achieve a climate-neutral Europe by 2050, the Commission will table a Fit for 55 package to reduce emissions by at least 55% by 2030. This will cover wide-ranging policy areas – from renewables to energy efficiency first, energy performance of buildings, as well as land use, energy taxation, effort sharing and emissions trading. A Carbon Border Adjustment Mechanism will help reduce the risk of carbon leakage and ensure a level-playing field by encouraging EU partners to raise their climate ambition. In addition, the Commission will propose measures to implement Europe's circular economy action plan, the EU biodiversity strategy and the farm to fork strategy.

  1. A Europe fit for the digital age

To make this Europe's digital decade, the Commission will put forward a road map of clearly defined 2030 digital targets, related to connectivity, skills and digital public services. The focus will be on the right to privacy and connectivity, freedom of speech, free flow of data and cybersecurity. The Commission will legislate in areas covering safety, liability, fundamental rights and data aspects of artificial intelligence. In the same spirit, it will propose a European e-ID. Initiatives will also include an update of the new industrial strategy for Europe, to take into account the impacts of the coronavirus, as well as a legislative proposal to improve the working conditions of platform workers.

  1. An economy that works for people

To ensure that the health and economic crisis does not turn into a social crisis, the Commission will put forward an ambitious action plan to implement fully the European Pillar of Social Rights, making sure that no one is left behind in Europe's recovery. The Commission will also come forward with a new European child guarantee, ensuring access to basic services like health and education for all children. To support our economies and strengthen the Economic and Monetary Union, it will revise the framework for handling EU bank failures, take measures to boost cross-border investment in the EU, and step up the fight against money laundering.

  1. A stronger Europe in the world

The Commission will ensure that Europe plays its vital role in this fragile world, including by leading the global response to secure a safe and accessible vaccine for all. It will propose a Joint Communication on strengthening the EU's contribution to a rules‑based multilateralism, a renewed partnership with our Southern Neighbourhood and a Communication on the Arctic. A new strategic approach to support disarmament, demobilization and reintegration of ex-combatants will also be presented. A Communication on the EU's humanitarian aid will explore new ways of working with our partners and other donors.

  1. Promoting our European way of life

In the face of COVID-19, the Commission will propose to build a stronger European Health Union, notably by strengthening the role of existing agencies and establishing a new agency for biomedical advanced research and development. To preserve and improve its functioning, a new strategy for the future of Schengen will be tabled. The new pact on migration and asylum will be followed up with a number of proposed measures on legal migration, including a ‘talent and skills' package. Other elements include an action plan against migrant smuggling, as well as a sustainable voluntary return and reintegration strategy. The Commission will continue to strengthen the Security Union, addressing terrorism, organised crime and hybrid threats. It will also present a comprehensive strategy on combating antisemitism.

  1. A new push for European democracy

To build a union of equality, the Commission will present new strategies on rights of the child and for persons with disabilities, as well as a proposal to combat gender-based violence. It will also propose to extend the list of euro-crimes to include all forms of hate crime and hate speech. The Commission will propose clearer rules on the financing of European political parties and take action to protect journalists and civil society against abusive litigation. A long-term vision for rural areas will propose actions to harness the full potential of these regions.

Given the long-term and transformative nature of the initiatives planned, it is more important than ever to legislate in the most impactful way and with the future in mind. The upcoming Communication on Better Regulation will renew this emphasis. It will focus on simplification and burden reduction, notably by introducing a ‘one-in-one-out' approach. The Fit for Future Platform will support the Commission in this ambition, particularly needed in the aftermath of the COVID-19 pandemic. To deliver on the ground, the Commission will also step up its outreach, with the Conference on the Future of Europe playing a central role.

A full list of the 44 new policy objectives under the six headline ambitions are set out in Annex 1 of the 2021 work programme.

Next steps

The Commission's 2021 work programme is the result of close co-operation with the European Parliament, member states and the EU consultative bodies. The Commission will now start discussions with the Parliament and Council to establish a list of joint priorities on which co-legislators agree to take swift action.

Background

Every year, the Commission adopts a work programme setting out the list of actions it will take in the coming twelve months. The work programme informs the public and the co-legislators of our political commitments to present new initiatives, withdraw pending proposals and review existing EU legislation. It does not cover the ongoing work of the Commission to implement its role as Guardian of the Treaties and enforce existing legislation or the regular initiatives that the Commission adopts every year.

The 2021 Commission work programme is closely linked to the recovery plan for Europe, with the NextGenerationEU recovery instrument and a reinforced EU budget for 2021-2027. The Recovery and Resilience Facility will channel an unprecedented €672.5 billion of grants and loans in the crucial first year of recovery. Meanwhile, Member States are drawing up recovery and resilience plans that set out reforms and investments aligned with the EU green and digital policy objectives: with a minimum 37% of green transition expenditure, and a minimum 20% related to digital. To repay the funds raised under NextGenerationEU, the Commission will put forward proposals for new own resources starting with a revised Emission Trading System, a Carbon Border Adjustment Mechanism and a digital levy.

More information

2021 Commission work programme, annexes and factsheets

Adjusted 2020 Commission work programme

Recovery plan for Europe

A European Green Deal

Shaping Europe's digital future

 

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Brexit

EU says Britain must respect withdrawal pact, deal or no deal

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Inter-institutional Relations and Foresight Commissioner Maros Sefcovic addresses lawmakers during a plenary session of Work Programme 2021 at the European Parliament in Brussels. Francisco Seco/Pool via REUTERS/File Photo

Britain must implement the Withdrawal Agreement on its exit from the European Union, regardless of the outcome of ongoing trade talks between the two sides, a senior European commissioner said on Wednesday (21 October), writes Kate Abnett.

“Deal or no deal, the Withdrawal Agreement must be respected,” European Commission Vice President Maros Sefcovic (pictured) told the European Parliament.

Sefcovic said the EU is committed to reaching a deal on the trade agreement and other aspects of their future relationship, but that the two sides remain “far apart” on the issues of fisheries and the so-called level playing field of fair competition.

“Our objective is still to reach an agreement that will pave the way for a new fruitful relationship between the EU and UK. We will continue to work for such an agreement, but not at any price,” he said.

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