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Unprecedented EU export and investment opportunities to Mercosur<\/strong><\/p>\n The deal with Argentina, Brazil, Paraguay and Uruguay (EU-Mercosur Partnership Agreement) will create the\u00a0world’s biggest free trade zone<\/strong>, covering a market of over 700 million consumers. EU firms will enjoy\u00a0first-mover advantage<\/strong>, benefitting from lower tariffs in a region where most other countries face high tariffs and other barriers to trade.<\/p>\n It is estimated the agreement can\u00a0increase EU annual exports to Mercosur by up to 39%<\/strong>\u00a0(\u20ac49 billion) supporting\u00a0<\/strong>more than\u00a0440,000<\/strong>\u00a0jobs<\/strong>\u00a0across Europe. It will\u00a0reduce often prohibitive Mercosur duties for EU exports<\/strong>, including on key industrial products, such as cars (currently 35%), machinery (14-20%), and pharmaceuticals (up to 14%).<\/p>\n The agreement will make it easier for EU companies to\u00a0invest in key supply chains<\/strong>, including for critical raw materials and related goods, all with a high level of environmental and labour protection. This can play a pivotal role in advancing the green and digital economic transformations of both regions, while ensuring predictable and stable supply chains.<\/p>\n New opportunities for food exports, strong defences for EU farmers<\/strong><\/p>\n EU agri-food exports to Mercosur are expected to grow by almost 50%<\/strong>, as the deal reduces high tariffs on key EU agri-food products, notably wine and spirits (up to 35%), chocolate (20%), and olive oil (10%).The deal will also support growth in exports of traditional, high-quality EU agri-food products. It will also put an end to unfair competition by Mercosur products that imitate authentic EU products by\u00a0protecting 344 EU Geographical Indications<\/strong>.<\/p>\n The deal provides full and comprehensive protection for all EU sensitivities in the agricultural sector.\u00a0<\/strong>First, it\u00a0limits preferential agri-food imports from Mercosur to a fraction of EU production\u00a0<\/strong>(for example, 1.5% for beef and 1.3% for poultry). Second, it establishes\u00a0robust safeguards<\/strong>\u00a0protecting sensitive European products against any harmful surge in imports from Mercosur. In this sense, the Commission proposes to supplement the agreement with a legal act that operationalises the bilateral safeguards chapter of the EMPA. This act, to be adopted by the European Parliament and the Council, aims in particular at protecting EU’s crucial and most sensitive agricultural sectors, recognising the concerns of European farmers. The Commission will address the issue with Mercosur countries with a view to ensuring smooth implementation of the Agreement.<\/p>\n The Commission will move forward with a number of accompanying initiatives, including steps towards potential\u00a0alignment of production standards on pesticides and animal welfare<\/strong>\u00a0applicable to imported products. In line with the\u00a0Vision for Agriculture and Food, the Commission will soon launch\u00a0impact assessments<\/strong>\u00a0on these issues.<\/p>\n The EMPA does not modify any EU sanitary and phytosanitary (SPS) import requirements. Our\u00a0food health and safety standards<\/strong>\u00a0will continue to apply to all products on the EU market \u2013 whether produced here or imported. In line with the ambition set out in the Vision for Agriculture and Food, the Commission is also stepping up SPS import controls by\u00a0increasing the number of audits and checks in third countries, and by strengthening controls on the ground<\/strong>.<\/p>\n Finally, the\u00a0Common Agriculture Policy\u00a0(CAP) after 2027 proposal includes a ring-fenced budget of at least \u20ac300 billion for\u00a0income support<\/strong>, ensuring that EU farmers continue to receive strong and stable income. The Commission is also introducing the new\u00a0Unity Safety Net<\/strong>\u00a0for crisis measures, with a total capacity of \u20ac6.3 billion \u2014 effectively doubling the current agricultural reserve. This reinforced support will help safeguard our farmers in times of market disturbances and growing geopolitical uncertainties.<\/p>\n Opening the Mexican market to EU exports<\/strong><\/p>\n The new agreement will further support economic growth and boost competitiveness on both sides. Mexico is one of the EU’s longest standing trading partners and second biggest trading partner in Latin America, with the original agreement dating back to 2000. The EU exports over \u20ac70 billion’s worth of goods and services to Mexico every year under the existing trade deal, supporting over 630,000 EU jobs.<\/p>\n Mexico is a net food importing country, therefore the agreement will strongly benefit EU agriculture exporters. The modernised EU-Mexico agreement will\u00a0remove the remaining prohibitive tariffs on EU agri-food exports to Mexico<\/strong>, such as cheese, poultry, pork, pasta, apples, jams as well as chocolate and wine. Removing these tariffs, which currently go up to 100% on certain EU exports, will make EU agricultural products much more competitive in Mexico. Furthermore, simpler procedures will make it quicker an cheaper for agri-food exporters to sell their product on the Mexican market. The deal also expands\u00a0protection from imitation to 568 iconic traditional high-quality European food and drink products<\/strong>\u00a0(Geographical Indications).<\/p>\n The modernised agreement will provide crucially important access to\u00a0critical raw materials,<\/strong>\u00a0thus benefiting strategic industries in Europe, Mexico being a top provider of fluorspar (used in a wide variety of chemical, steelmaking and ceramic processes), bismuth (used for pharmaceuticals and cosmetics) and antimony (used, for example, flame retardant, lead-acid batteries, glass and ceramics).<\/p>\n The modernised agreement will reinforce engagement on sustainable development, crime, migration, and gender equality. It promotes and protects human rights, multilateralism, and security, and facilitates strategic cooperation on key issues like de-risking supply chains, securing critical raw materials, and tackling climate change.<\/p>\n Next steps<\/strong><\/p>\n The EMPA and the MGA require separate approval by the European Parliament and Member States before they each can enter into force. The Commission proposals for conclusion and signature include two parallel legal instruments for each agreement:<\/p>\n