Blockbuster EU-Mercosur trade deal enters into force

AFP | Brussels

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The European Union’s mammoth trade deal with South American bloc Mercosur provisionally enters into force yesterday, despite a pending court ruling on its legality.

The agreement to create one of the world’s biggest free-trade zones was sealed in January after more than 25 years of intermittent negotiations.

Together, the EU and Mercosur account for 30% of global GDP and more than 700 million consumers.

The deal, which eliminates tariffs on more than 90% of trade between the two sides, has proven divisive in Europe. France has led opposition over concerns some of its farmers will be left worse off.

But -- backed by a majority of EU countries -- Brussels ploughed ahead as it pushes to diversify trade in the face of challenges from the United States and China.

European Commission chief Ursula von der Leyen on Friday hailed the start of the deal’s implementation, stating on X: “Provisional application will show the agreement’s tangible benefits.”

She said that “as of now... tariffs start falling” and European companies “are gaining access to new markets”.

The agreement favours European exports of cars, wine and cheese, while making it easier for South American beef, poultry, sugar, rice, honey and soybeans to enter Europe.

Von der Leyen and Antonio Costa, the president of the European Council, held a video call to mark the occasion with Mercosur leaders, which include Argentina and Brazil.

Afterwards, Costa said the agreement was “more than a trade deal” but “a partnership that reflects our shared vision of the world”.

“A resilient multilateral system rests on win-win agreements like this, grounded on rules, values and shared interests,” he wrote on X.