OSAKA, Japan – European Union and Mercosur leaders lauded the conclusion of a trade deal between the two blocs 20 years after negotiations began during a G20 summit that risked being overshadowed by global trade tensions.
Mauricio Macro, president of Argentina, which currently presides over the Mercosur group, hailed the deal as one of the “most important in the bloc’s history” while cosignatory, EU commission chief Jean-Claude Juncker, labeled it a landmark agreement.
“This deal sends a real message in support of open, fair, sustainable and rules-based trade because trade creates good jobs for all concerned,” Juncker said at a press conference at the G20 summit in Osaka, Japan. “It shows that in these turbulent moments, agreements can be reached. Mutually beneficial compromises can be found.”
He said the massive agreement, which creates a free trade area covering 780 million people, would allow European companies to save up to 4 billion euros ($4.5 billion) on duties.
“Mercosur will in turn have access to the biggest market in the world. Its companies will be able to serve over 500 millions of consumers, virtually tariff-free,” he added.
“The agreement we have reached with Mercosur is an action that speaks louder than a thousand communiques,” he concluded.
For Macri, the agreement will “strengthen the region’s growth” – not only by trade but also by the flow of investments, and by giving “more peace of mind” and “clearer and more stable rules” for those who want to settle and develop projects.
He said Mercosur members – Brazil, Argentina, Uruguay and Paraguay – were “very happy” because of the opportunity for growth and employment the agreement means for them.
He said it was a deal that is ultimately “one of the most important things that has happened and one of the few good pieces of news in months” and that allows the interconnection of the economies of the region with those of the EU and will guarantee growth and reduction of poverty.
The enormous trade deal, four times larger than the EU’s deal with Japan, was 20 years in the making.
In fact, the agreement was announced exactly two decades to the day since initial talks began in Rio de Janeiro.
The announcement came at a time of rocketing trade tensions and a growing trend in protectionist economic policies, which are characterized by the ongoing commercial spat between the United States President Donald Trump and China’s Xi Jinping.
EU-Mercosur negotiators and the foreign ministers from the four South American countries in question, spent the last week in Brussels smoothing out the final details of the pact.
In the final phase, seven heads of state and government from the EU signed a letter to Juncker proposed by Spain’s prime minister, Pedro Sanchez, which demanded the conclusion of negotiations.
“Thanks to, among others, the decisive role os Spain during the last few weeks. Excellent news for the Ibero-American community in favor of trade as an engine of progress,” Sanchez said on Twitter.
The EU is expected to close out another trade deal with Vietnam on Saturday.
Joining EU leaders at the Osaka presser was Brazil’s president, Jair Bolsonaro.