Europe’s raw material supply could also benefit from the free trade agreement in the long term.
There’s new momentum in the trade agreement between the European Union and the South American Mercosur bloc: despite an ongoing review by the EU Court of Justice, the economic deal is set to be applied provisionally. This was announced in a statement by EU commission president Ursula von der Leyen. Shortly before, Uruguay and Argentina became the first countries to ratify the agreement, providing the basis for the EU’s next step. Last Wednesday, Brazil’s Chamber of Deputies approved the trade deal, which will soon be submitted to the Senate.
In January, after more than 25 years of negotiations, a breakthrough toward the free trade agreement had been achieved (we reported). However, the European Parliament then voted for a legal review, which would have delayed the formal entry into force by at least several months. Now, all parties – the EU member states as well as Brazil, Argentina, Paraguay, and Uruguay – can benefit from most of the advantages of the free trade agreement earlier than expected. The deal is expected to create a trade zone of over 720 million people and reduce tariffs worth billions of dollars. Supporters also hope for improved access to critical raw materials for Europe’s key industries: Argentina hosts some of the world’s largest lithium deposits for batteries, while Brazil holds the largest rare earth reserves after China.
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