The European Union has agreed on a major trade deal with the South American bloc Mercosur (Mercado Común del Sur — the South American Common Market), which brings together Brazil, Argentina, Paraguay and Uruguay. The future free trade area will cover more than 700 million people and become one of the largest in the world.
The agreement provides for a significant reduction or elimination of customs duties and other trade barriers. Europe will expand exports of cars, industrial products and pharmaceuticals, while Mercosur countries will increase supplies of agricultural goods, raw materials and minerals. Lower costs, higher trade turnover and the creation of new jobs are expected.
For the EU, the strategic aspect is also important: greater access to raw materials will make it possible to diversify supply and reduce vulnerability to external economic fluctuations. European manufacturers will gain access to South America’s growing markets. South American companies will gain access to a solvent European audience. And ordinary people on both sides of the Atlantic will gradually see more goods on shelves at more reasonable prices.
