Mercosur and the European Union set their eyes on Asia after their free trade agreement

Mercosur and the European Union turned their eyes to Asia after the free trade agreement

The European Union (EU) and Mercosur, which signed a free trade agreement after 26 years of negotiations, want to pursue new cooperation with other key global partners, with particular attention, in a context marked by the US tariff war.

The union, made up of Argentina, Brazil, Paraguay and Uruguay, broke out of the doldrums and struck three trade deals in two years with Singapore, EFTA (Iceland, Liechtenstein, Norway and Switzerland) and the European Union, the latest of which was signed on Saturday in Asuncion.

The agreement with the Twenty-Seven, which still needs several steps before it can be implemented, will create the world's largest free trade area by gradually reducing or eliminating 90% of tariffs in the region of 720 million people.

Mercosul's next stop: United Arab Emirates

And more is coming.The Southern Common Market (Mercosur) and the United Arab Emirates hope to conclude negotiations on their trade deal this year.Furthermore, at the last summit of the South American group, held in Foz de Iguazú (Brazil) in December, negotiations were started to reach an agreement on tariff options with Vietnam.

And it is more, like Marcosur also agreed with Japan to strengthen bilateral relations.Ah give it since the 2003 trade contract.

"We are paying great attention to the agreement with Japan, and with South Korea, and with other Asian countries outside of China, which is a strategic partner for all the countries of Latin America and Mercosur," the president of Paraguay, Santiago Peña, told reporters after signing the agreement with the EU.

Business Openness

Paraguay holds the semi-annual presidency of Mercosur and has the support of Brazil, mainly from a partner and openness perspective.

Lula was the key to reaching an agreement with the EU and boasted that Brazil would open 500 new foreign markets for Brazilian products since returning to power on January 1, 2023.

All these implications of the talks come at a time of World Council realignment, mired in a tariff war with the US and a desire for regional expansion, and China gaining ground in key minerals, key energy transitions, digitization and defense sectors.And Europe and the so-called Global South are moving their pieces amid this climate of distrust towards the White House and its servant Donald Trump.

In fact, one of the goals of the agreement with Mercosur is precisely to reduce the dependence on rare earths in the relevant sector, as recognized by the EU Trade Commissioner, Maroš Šefčovič, in an interview with EFE in Asunción.

The EU is also knocking on Asia's door

Like Mercosur, the European Union is also looking at Asia.Last September, it signed a free trade agreement with Indonesia and is now focusing its efforts on finalizing the deal in India.

In fact, Von der Leyen and the President of the European Council, António Costa, will go to the Asian giant for a summit on January 27, and they will meet with Prime Minister Narendra Modi.The purpose of the trip?To sign the long awaited free trade agreement between the two sides.

At the signing in Asuncion, Antonio Costa explained: the EU is determined to strengthen its economic security by "opening new markets, diversifying supply chains and reducing overdependence".

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