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European Union-Latin America and the Caribbean: trade and investment European Union-Mercosur association agreement: its commercial pillar and potential effects in the agroindustrial sector





The relationships between the European Union (EU) and
Latin America and the Caribbean (LAC) are based on historical-cultural
values that have evolved towards a fluid trade and investment exchange
and with potential for expansion and deepening. The study aims to
identify the current situation of trade and investment relationships
between the EU and LAC, disaggregating the analysis at the level of the
Mercosur subregion (MCS), to analyze the trade pillar of the agreement
closed on 28.06.2019 and diagnose aspects of its potential impact on
the agro-industrial o agri-food sector. The applied methodology follows
a normative and positive approach, supported by the latest statistical
information available. The results show that the trade relationship
between the EU and LAC places the EU, in general, as a third trading
partner, and it is characterized by an asymmetric exchange. The MCS
subregion exports to EU primary products and manufactures based on
natural resources and imports from EU medium and high technology
manufactures. In terms of investment, the EU is the main investor in
LAC. The EU-MCS agreement was closed and it is in the process of
legal review. The economic-commercial chapter may entry into force
independent of the rest of the agreement. Specifically for agricultural
products, it provides that the EU grants preferential access to 99% of
trade with MCS, with tariff elimination for 84% of imports and for the rest
quotas or fixed preferences; and MCS will release 88% of imports. As
main final considerations, the following stand out: the parties may not
maintain, introduce or reintroduce subsidies -or other measures with
equivalent effect- to exports on an agricultural product that is exported
or incorporated in a product that is exported; the environmental aspect
is foreseen in the chapter of the agreement referring to trade and
sustainable development and, through dialogue, it may be evaluated
how to improve it.