European Commission | EU-Mercosur Interim Trade Agreement Starts to Provisionally Apply

On 1 May, the EU-Mercosur Interim Trade Agreement (ITA) will start being provisionally applied. This will allow EU producers, exporters, and farmers to start reaping the benefits of this deal as of day one. 

The provisional application of the ITA will create new opportunities, supporting the exports of industrial goods, services, and agri-food products to Argentina, Brazil, Paraguay and Uruguay. It will immediately remove or drastically reduce tariffs on key exports such as cars, pharmaceuticals, and foresee a first tariff cut for most agri-food products such as wine, spirits and olive oil, immediately creating new export opportunities for EU farmers.

Benefits for exporters of goods and services

Exporters of goods will benefit from immediate tariff relief as of 1 May, when the first tariff cuts start applying.

Moreover, EU companies can start bidding for public and government contracts in Mercosur on an equal footing with local companies. The deal removes most preferences given to domestic firms in government contracts both at federal and state level, making the tendering for contracts procedures simpler and more transparent.

Services exporters will immediately benefit from new opportunities as well, thanks to the implementation of clear licensing rules, non-discriminatory procedures, and movement of workers.

1 May also marks the start of eliminating non-tariff barriers and technical barriers to trade, with rules on conformity assessment, rules on labelling and respect of international standards being applied. This will ensure that EU companies can operate in an easier and faster manner, delivering immediate commercial benefits.

Benefits for farmers and agri-food exporters

The provisional application of the deal creates a better and more competitive environment for EU agri-food producers to export their products to the four countries of Mercosur.

The EU is the world’s biggest exporter of food and drink products, and our high-quality products are renowned across the globe. The agreement is expected to lead to a 50% increase in EU agri-food exports to the Mercosur region. As of 1 May, the EU will have access to the first part of tariff rate quota volumes, while a first tariff cut for most agri-food products will create new export opportunities for EU farmers immediately.

Last but not least, Mercosur countries will start protecting 344 EU Geographical Indications (GIs) as of 1 May, banning imitations as well as misleading terms, symbols, flags or images. Only genuine products, such as, for example, Roquefort cheese made in Roquefort, France, will carry the GI name.

The agreement also provides an unprecedented set of measures to protect sensitive agri-food sectors and ensure level-playing field and reciprocity, including carefully calibrated tariff rate quotas, a robust safeguard mechanism, and enhanced controls.

Background 

Provisional application follows the European Council decision in January to empower the Commission to provisionally apply the agreement as from the first ratification by one Mercosur country. On 27 February, European Commission President Ursula von der Leyen announced that the EU would proceed with provisional application. Provisional application allows the EU to immediately benefit from this deal, while ensuring democratic process and sensitivities are fully respected.

Compliments of the European Commission