After 20 years of negotiation UE and Mercosul finally close comercial agreement
After 20 years of negotiation, UE and Mercosul (the South-American economic block composed officially by Brazil, Argentina, Uruguay and Paraguay) had closed last week a free-trade agreement. The two blocks represents around 25% of global GDP and a market equivalent to 780 million people.
Although the block's member states and European Parliament still have to authorise the agreement to make it effective (which can request several amendments), the agreement is expected to be one of the most important of all times and may benefit enormously both blocks' economies.
According to Brazilian Economy Ministry, as soon as the agreement is effective, it is estimated an increase of 87,5 billion dollars in Brazilian's GDP in a 15 years term, which can reach 125 billion dollars if non-tariff barriers are reduced together with Brazilian's economy improvement. It is also expected an increase of 113 billion dollars of investments in Brazil for the same period, and also an increase of exports to UE in approximately 100 billion dollars.
Although the agreement's details has not being disclosed yet, the most significant impacts of the agreement for Brazilian economy are the reducing of non-tariffs barriers, the balancing of competitiveness' conditions, the social and environment compensatory measures, legal certainty and transparency, which will certainly insert Brazil in market's global chains and consequently to improve investments, employment and income.