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After 20 years of negotiations, the European Union and Mercosur (Brazil, Argentina, Paraguay, Uruguay, and Bolivia) have sealed a sweeping trade agreement. The deal creates one of the world’s largest free-trade zones, covering 780 million people and a combined GDP of roughly $21 trillion.
The pact aims to eliminate tariffs on 90% of goods traded between the two blocs over the next decade. European manufacturers gain greater access to South American markets, while Mercosur nations secure protected quotas for key exports like beef, poultry, and sugar. The agreement also includes provisions on sustainable development, labor rights, and intellectual property.
Despite the breakthrough, the deal faces significant hurdles before ratification. European farmers have protested the influx of South American agricultural products, citing environmental and hygiene standards. Climate groups warn that expanded exports could fuel deforestation in the Amazon. Meanwhile, Mercosur members must balance domestic political pressures and industrial sectors wary of increased European competition. For the pact to take full effect, it must be approved by the parliaments of all EU member states and Mercosur countries—a process that could take years.
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