EU-Mercosur trade deal makes way for new opportunities

The European Union and Mercosur states – Argentina, Brazil Paraguay and Uruguay, have reached a conclusion of negotiations for a comprehensive and ambitious Free Trade Agreement at the end of last month.

Euratex, the European Apparel and Textile Confederation, said it welcomes the agreement. The organisation has been actively engaged in the negotiation process to ensure an agreement fit for textile and clothing companies, also preserving social and environmental standards in the manufacturing of high-quality products. “Despite a challenging trade environment, we are glad rules-based trade has prevailed,” said Alberto Paccanelli, Euratex President.

The EU-Mercosur FTA is the largest trade agreement ever concluded by the European Union, covering a population of 780 million. According to the EU, this agreement will save European companies over EUR 4 billion in duties. For the textiles and clothing industry, in particular, tariffs have been very high, reaching 35% in Brazil.

“In 2018 EU exports of textile and clothing products to Mercosur were 460 million euros and the elimination of tariffs will open further business opportunities for our sector,” added Mr Paccanelli. “We look forward to a swift approval by the European Council and the European Parliament.”

The EU is the biggest foreign investor in Mercosur with a stock of EUR 381 billion, while Mercosur’s investment stock in the EU amounts to EUR 52 billion in 2017. While the relationship is very substantial, both exporters and potential investors face barriers in Mercosur markets. One of the main goals of the new EU-Mercosur trade deal is to remove these barriers and help EU firms – especially smaller ones – to export more.

The voice of the European textiles and clothing industry, Euratex works to achieve a favourable environment within the EU for design, development, manufacture and marketing of textile and clothing products.

The EU textile and clothing industry, with around 171,000 companies employing 1.7 million workers, is an essential pillar of the local economy across many EU regions. With over EUR 50 billion of exports, the industry is a global player successfully commercialising high added value products on growing markets around the world.

Working together with EU institutions and other European and international stakeholders, Euratex focuses on clear priorities: an ambitious industrial policy, effective research, innovation and skills development, free and fair trade, and sustainable supply chains.

Courtesy: Innovation In Textile