Overview
- The EU-Mercosur agreement, which took provisional effect Friday, begins cutting tariffs on more than 90% of trade across the two blocs.
- EU lawmakers sent the pact to the Court of Justice in January, and a ruling that could take up to two years may suspend the provisional deal.
- Brazil validated the accord this week by presidential decree, and EU and Mercosur leaders planned a videoconference to mark the launch.
- The pact boosts EU sales of cars, wine and cheese, and allows a 7.5% tariff on the first 99,000 tons of Mercosur beef each year, a change that has EU farmers on edge.
- Analysts say the macro payoff will be modest and slow, with the European Commission projecting only a 0.05% lift to EU GDP by 2040.