Why European Union-Mercosur trade deal is a good sign for the global economy?

The EU-Mercosur trade deal was between the 27-nation EU and South America’s Mercosur bloc on Saturday.

EU-Mercosur trade deal: In a significant global economic event amid the trade tensions around US tariffs, top officials from the EU and the South American bloc Mercosur signed a free trade agreement on Saturday. Taking the massive step towards paving the way for European Union’s largest-ever trade accord after 25 years of negotiations, both the groups decided to create history in Paraguay. Designed to lower tariffs and boost trade between the two regions, the EU-Mercosur deal between the 27-nation EU and South America’s Mercosur bloc has much larger global economic implications.

What is covered in the EU-Mercosur deal?

The EU-Mercosur deal will eliminate tariffs on 90% of trade, boosting South American agri-exports like beef and soy to Europe, while European industrial goods like cars and machinery get easier access to South America, creating a massive market of over 700 million consumers.

Why the EU-Mercosur deal is good news for world?

Highlights shift towards trusting multilateral trade agreements at a time US tariffs are troubling almost every country around the world.
Creates a massive free trade zone with 700m+ consumers, promoting global economic growth.
The EU-Mercosur deal pushes back against protectionism and trade tensions around the world.
The deal also boosts economic ties between Europe and South America at a time when US trade
The EU-Mercosur deal also increases competition with China and US in Latin America.

What EU leaders said on the EU- Mercosur trade deal?

“We choose fair trade over tariffs, we choose a productive long-term partnership over isolation,” EU chief Ursula Von der Leyen said at the signing ceremony in Paraguay’s capital, Asuncion, a Reuters report said.

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“This agreement sends a very strong message to the world. It reflects a clear and deliberate choice. We choose fair trade over tariffs. We choose a productive, long-term partnership over isolation”, she added.

“This agreement will help both our blocs navigate an increasingly turbulent political environment without abandoning our values, marking a true milestone in shoring up our economic security,” European Council President Antonio Costa said on the deal.