President Luiz Inácio Lula da Silva signed on Tuesday (28th), at the Planalto Palace, the decree promulgating the agreement between Mercosur and the European Union (EU). The treaty is set to enter into force provisionally as of May 1st in Brazil.
The measure is the final act to incorporate international treaties and agreements into Brazilian law, allowing the gradual implementation of their rules between the blocs.
The promulgation occurs following approval of the text by the National Congress. The agreement creates a free trade zone involving 31 countries, 27 from the EU and four from Mercosur, with a combined population of 720 million inhabitants and approximately US$ 22 trillion in Gross Domestic Product (GDP).
The Minister of Foreign Affairs, Ambassador Mauro Vieira, stated that the agreement is a historic milestone for the blocs.
"The agreement means deepening our relationship with our second largest trading partner and Brazil's largest foreign investor. With it, we have the potential to increase the diversification of global partnerships, boost our exports and definitively integrate Brazil into European production chains," he said.
Changes:
According to the National Confederation of Industry (CNI), more than 5,000 Brazilian products sold to the European bloc will now have zero tariffs in this initial phase. Without European Union tariffs, Brazilian companies can sell most of their products at lower cost, boosting competitiveness against competitors from other countries.
Among the sectors that should feel the most positive impact are machinery and equipment (21.8% of the 2,932 products with immediate reduction); food items (12.5%); metallurgy (9.1%); electrical machines, apparatus and materials (8.9%); chemical products (8.1%).
One highlight is the machinery and equipment sector, as almost 96% of Brazilian exports to Europe will now be exported tariff-free. This includes products such as compressors, industrial pumps and mechanical parts.
In the food sector, hundreds of items will also have zero tariffs, increasing the presence of Brazilian products in European trade.
During his speech, President Lula underscored the delay in closing the treaty.
"When an agreement comes from colonizers to the colonized, it comes faster, but when the colonized decide to stand up and say that they have rights, things become more difficult because then we become competitive with products that are produced in other countries," he said.
The president also declared that the agreement "was made through iron, sweat and blood".
"There are many things they want to prevent, that Brazil grows, competes, puts its products on the foreign market. And it came at the moment to reinforce the established idea of multilateralism," he stressed.
