The European Union reaffirms itself as a defender of free trade

17 July, 2019
The European Union is preparing two historic free trade agreements with Mercosur and Vietnam, which are characterised by several elements, such as the elimination of import tariffs, simplification of customs procedures, labour rights, protection for farmers, support for SMEs, and better access to public tenders. These trade agreements have yet to enter into force and go through a series of parliamentary procedures, but it is very likely that in a couple of years they will enter into force.

By breaking down these two agreements we find a great opportunity for the European region, these being the most important agreements of recent times.

The agreement with Mercosur is possibly the most significant, which will boost the growth of South American markets, especially with Brazil and Argentina. In terms of tariffs, this agreement is the most relevant that the European Union has signed in all its history. The automotive, components, machinery, chemicals, food, or pharmaceutical sectors are some of the many sectors that will benefit from this agreement. However, not all sectors will benefit from this new agreement, the main agricultural entities of the European Union have mobilised to stop this agreement. The Mercosur countries are a world agricultural productive and exporting power, so many European products, especially Spanish ones, can be seriously affected.

As for the agreement with Vietnam, it would eliminate the tariffs of both parties, and would reduce bureaucratic procedures and gratulatory barriers. As with the agreement with Mercosur, several sectors would benefit from this improved market access, such as the automotive, machinery, chemical, food, wine or pharmaceutical sectors. This emerging market would be a great opportunity for Spanish exporters, since it is a very dynamic market with more than 95 million consumers. Experts have catalogued this country’s market as “the new China” due to its potential growth, and it would also be the country most benefited from the commercial war between the United States and China.

The agreements with Japan, Canada, Vietnam and Mercosur can still be joined by trade agreements with New Zealand and Australia, or a new agreement with the USA. The work carried out so far by the European Commission is being very important, and although negotiations must continue, we must not forget the existing agreements and we must monitor their implementation.

 

 

Fuente: El País, Crédito y Caución, Blog Salmon