MERCOSUR

PRE-VIEWING:

1. What is MERCOSUR? What countries are part of the group?
2. What do you know about the EU-Mercosur Trade Deal?

WHILE-VIEWING:

While watching, pay attention to the following words and expressions in context. Use them in your answers to the questions below and discussion.

• to sign and ratify a trade deal
• to bring economic benefits
• to liberalize and reform
• to fall victim to protectionism and trade wars
• to focus on regional trade integration
• to develop international partnerships
• to look for new markets to expand
• competitive
• to have a protectionist approach to agriculture
• the opening up of the economies
• to fully enter into force
• to stay off limits
• to increase the quota
• the obsolete policy
• to be a strong advocate of the deal
• to face competition from
• the environmental regulation has weakened significantly
• to meet climate commitments
• to oppose the deal
• to make economic concessions

AFTER-VIEWING:

1. How long will it take the trade deal between the EU and MERCOSUR to enter into force after ratification? 
2. Why does the deal face opposition from European farmers? 
3. What makes the deal controversial? Who is going to benefit most?

What Is MERCOSUR?

HIGHLIGHTS

• read the passage
• focus on key terms
• summarise the information
• elaborate on:

• The Formation of MERCOSUR
• The Integration of MERCOSUR into the Union of South American Nations
• Goals of the New EU-Mercosur Trade Deal
• Values Promoted by the Agreement

KEY TERMS 

potential investors	any person (an individual, company, business or organisation) with whom, within the relevant period, the company or any group company is in negotiations for such person to invest in any target company
bilateral trade	the exchange of goods between two nations promoting trade and investment
intellectual property rights	the legal rights given to the inventor or creator to protect his invention or creation for a certain period of time
food safety standards	the regulatory requirements related to food safety, designed to protect consumers from the risk of illness caused by eating unsafe foods
regulatory practices	processes and tools to help improve the quality and effectiveness of measure, actions and activities
uphold	to maintain, affirm, or defend against opposition or challenge
signatory	the signer, or one of the signers, of a document
commodities	an article of trade or commerce, esp. a product that can be bought or sold
suspend	to remove from membership in or prevent from attending, usually for a limited time, a job, school, club, etc., esp. as a punishment
rotate	to replace (a person, troops, etc.) by another or others, usually according to a schedule or plan

The European Union and Mercosur states – Argentina, Brazil Paraguay and Uruguay – reached a political agreement on 28 June 2019 for an ambitious, balanced and comprehensive trade agreement.

• Press release — EU and Mercosur reach agreement on trade
• Memo

The EU is Mercosur’s number one trade and investment partner. EU exports to Mercosur were €45 billion in goods in 2021 and €17 billion in services in 2020.

The EU is the biggest foreign investor in Mercosur with a stock of €330 billion in 2020. While the relationship is very substantial both exporters and potential investors face barriers in Mercosur markets.

The goal of the new EU-Mercosur trade deal is to

• Increase bilateral trade and investment, and lower tariff and non-tariff trade barriers, notably for small and medium sized enterprises
• Create more stable and predictable rules for trade and investment through better and stronger rules, e.g. in the area of intellectual property rights (including geographical indications), food safety standards, competition and good regulatory practices
• Promote joint values such as sustainable development, by strengthening worker’s rights, fight climate change, increase environmental protection, encourage companies to act responsibly, and uphold high food safety standards

The agreement represents a win-win for both the EU and Mercosur, creating opportunities for growth, jobs and sustainable development on both sides.

About the agreement

Agreement in principle

Read the different sections of the agreement

Documents

Round reports, EU proposals and impact assessments

Factsheets and guides

Find out more about the EU-Mercosur trade agreement.

The agreement explained

The EU-Mercosur trade deal explained in plain English.

Information for businesses

EU-Mercosur Trade in your town

EU-Mercosur trade in your town

Towns and cities across the EU export to Mercosur. Here’s just a sample. Finland — Giving Argentinians a taste of traditional Finnish brewing

The company sees growing demand for its types of beer in South America, and especially in Argentina, and would like to launch exports there. A trade agreement between the EU and Mercosur would open up a whole new market, where similar tastes in beer are found on both sides of the Atlantic.EU trade deals give Europeans more and more opportunities. Find out more.

More on Trade relations

Mercosur

EU trade relations with Mercosur. Exporters’ information Exporting from the EU, importing into the EU — all you need to know is on the Access2Markets porta

Southern Common Market (MERCOSUR)

Founded in March 1991 by the Treaty of Asunción between Argentina, Brazil, Paraguay and Uruguay, MERCOSUR committed the signatories to the progressive reduction of tariffs culminating in the formation of a common market on 1 Jan. 1995. This duly came into effect as a free trade zone affecting 90% of commodities. A common external tariff averaging 14% applies to 80% of trade with countries outside MERCOSUR. Details were agreed at foreign minister level by the Protocol of Ouro Preto signed on 17 Dec. 1994.

In 1996 Chile negotiated a free trade agreement with MERCOSUR which came into effect on 1 Oct. Subsequently Bolivia, Chile, Colombia, Ecuador, Guyana, Peru and Suriname have all been granted associate member status. Bolivia began the accession process to full membership in 2012. Mexico and New Zealand have observer status. Venezuela, which had associate membership between 2004 and 2006, became the fifth member of MERCOSUR in July 2006, although it was not going to have full voting rights until all the other full members had ratified its entry into the organization. Paraguay was the only country still to approve Venezuela’s full membership, but it was suspended from MERCOSUR in June 2012 following the impeachment of its president, Fernando Lugo. With Paraguay suspended, Venezuela was then formally admitted in July 2012. Paraguay was readmitted in Aug. 2013 after the swearing-in ceremony of its new democratically-elected president, Horacio Cartes. Venezuela was suspended in Dec. 2016 for failing to meet membership requirements.

Organization. The member states’ foreign ministers form a Council responsible for leading the integration process, the chairmanship of which rotates every six months. The permanent executive body is the Common Market Group of member states, which takes decisions by consensus. There is a Trade Commission and Joint Parliamentary Commission, an arbitration tribunal whose decisions are binding on member countries, and a secretariat in Montevideo.

Further to the treaty signed by 12 South American countries in May 2008, it is anticipated that MERCOSUR will gradually be integrated into the Union of South American Nations.

• Headquarters: Dr Luis Piera 1992, Piso 1, 11200 Montevideo, Uruguay.
• Website (Spanish and Portuguese only): http://www.mercosur.int
• President pro tempore: Mauricio Macri (Argentina).

KEY TERMS

MATCH THE TERM WITH ITS DEFINITION:

potential investors	processes and tools to help improve the quality and effectiveness of measure, actions and activities
bilateral trade	to remove from membership in or prevent from attending, usually for a limited time, a job, school, club, etc., esp. as a punishment
intellectual property rights	to maintain, affirm, or defend against opposition or challenge
food safety standards	the exchange of goods between two nations promoting trade and investment
regulatory practices	an article of trade or commerce, esp. a product that can be bought or sold
uphold	any person (an individual, company, business or organisation) with whom, within the relevant period, the company or any group company is in negotiations for such person to invest in any target company
signatory	the regulatory requirements related to food safety, designed to protect consumers from the risk of illness caused by eating unsafe foods
commodities	to replace (a person, troops, etc.) by another or others, usually according to a schedule or plan
suspend	the signer, or one of the signers, of a document
rotate	the legal rights given to the inventor or creator to protect his invention or creation for a certain period of time

RESTORE THE SENTENCE BY FILLING IN THE KEY TERM:

1. The EU is the biggest foreign investor in Mercosur with a stock of €330 billion in 2020. While the relationship is very substantial both exporters and ………………  face barriers in Mercosur markets.

2. Increase ………………  and investment, and lower tariff and non-tariff trade barriers, notably for small and medium sized enterprises

3. Create more stable and predictable rules for trade and investment through better and stronger rules, e.g. in the area of ………………  (including geographical indications), ……………… , competition and good ………………

4. Promote joint values such as sustainable development, by strengthening worker’s rights, fight climate change, increase environmental protection, encourage companies to act responsibly, and ……………… high food safety standards

5. Founded in March 1991 by the Treaty of Asunción between Argentina, Brazil, Paraguay and Uruguay, MERCOSUR committed the ……………… to the progressive reduction of tariffs culminating in the formation of a common market on 1 Jan. 1995.

6. This duly came into effect as a free trade zone affecting 90% of ……………… .

7. With Paraguay ……………… , Venezuela was then formally admitted in July 2012.

8. The member states’ foreign ministers form a Council responsible for leading the integration process, the chairmanship of which ……………… every six months

COMPLETE THE PASSAGE WITH THE WORDS FROM THE BOX:

exhaustive domestic industry Transition period serious injury Interested parties exceptional circumstances  threat of serious injury like or directly competitive product competent investigating authority preclude

BILATERAL SAFEGUARD MEASURES

Article 1

For the purposes of this Chapter:

1. “…………………….” means:

a) in the case of the EU, the European Commission;

b) in the case of MERCOSUR, Ministerio de Producción or its successor in Argentina, Secretaria de Comércio Exeterior from the Ministério da Economia or its successor in Brazil, Ministerio de Industria y Comercio or its successor in Paraguay, and Asesoría de Política Comercial del Ministerio de Economía y Finanzas or its successor in Uruguay;

2. “…………………” shall be understood to mean the significant overall impairment in the position of a domestic industry;

3. “…………………….” shall be understood to mean the serious injury that is clearly imminent, based on facts and not merely on allegation, conjecture or remote possibility;

4. “…………………….” ” shall be understood to mean the producers as a whole of the like or directly competitive products, operating in the territory of the Party or Signatory Party, or when it is not possible, those whose collective output of the like or directly competitive products constitutes normally more than 50% but in 5. …………………… not less than 25% of the total production of such products;

6. “…………………….” means a product which is identical, i.e. alike in all aspects to the product under consideration, or another product which, although not alike in all aspects, has characteristics closely resembling those of the product under consideration, or a product which directly competes within the internal market of the importing Party or Signatory Party, given its degree of substitutability, basic physical characteristics and technical specifications, final uses and channels of distribution. This list is not 7. ………………, nor can one or several of these factors necessarily give decisive guidance.

8. “…………………….” shall include:

a) exporters or foreign producers or importers of a product subject to investigation, or a trade or business association, a majority of the members of which are producers, exporters or importers of such product;

b) the government of the exporting Party or Signatory Party; and

c) producers of the like or directly competitive product in the importing Party or Signatory Party or a trade and business association, a majority of the members of which produces the like or directly competitive product in the territory of the importing Party or Signatory Party.

This list shall not 9. ……………. Members from allowing domestic or foreign parties other than those mentioned above to be included as interested parties. 

10. “…………………….” shall mean 12 years from the date of entry into force of this Agreement. Regarding any goods for which the Tariff Liberalization Program of the Party applying the measures provides for tariff elimination in 10 or more years, the transition period shall mean 18 years from the date of the entry into force of this Agreement.

MIXED BAG

UPHOLDING THE EU’S RIGOROUS FOOD SAFETY STANDARDS

Any product arriving to Europe must comply 1) with/ to the EU’s 2) astringent/ stringent food safety standards.

The EU-Mercosur trade agreement does not change anything in that respect. The agreement also reaffirms the 3) ‘ cautionary / precautionary principle’, the right of both sides to 4) adopt/ adapt measures to protect human, animal and plant health, including in situations 5) where/ when scientific information is not 6) inclusive/conclusive.

At the same time, the provisions of the agreement will help us better tackle common challenges such as antimicrobial resistance, promote animal welfare standards and reinforce the flow of information to help 7) keeping/ to keep unsafe products out of the market.

CONTRIBUTING TO SUSTAINABLE PRODUCTION

The EU-Mercosur agreement is based on the 8) premise/ premises that trade should not happen at the expense of the environment or labour conditions; 9) in contrast/on the contrary, it should promote sustainable development.

‣ The ‘precautionary principle’ is upheld in the agreement and ensures that the EU and the Mercosur countries can continue to regulate, including on environment or labour matters, even if this 10) effects/ affects trade, also in situations where scientific information is not conclusive.