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European Union (EU) – MERCOSUR Trade Agreement: Implications for U.S. Exports and Market Shares

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  • Valdes, Constanza
  • Tsigas, Marinos

Abstract

On June 28, 2019, the European Union (EU) and the South American trading bloc composed of Brazil, Argentina, Paraguay, and Uruguay known as the MERCOSUR finalized negotiations for a trade agreement. This trade agreement encompasses 22 percent of the world’s Gross Domestic Product (GDP) in 2021, close to 25 percent of global trade, and includes over 780 million people. The agreement will eliminate 93 percent of tariffs for MERCOSUR exports to the EU, while offering preferential treatment for the remaining 7 percent. The agreement creates tariff-rate quotas (TRQs) for selected EU agricultural exports to MERCOSUR. The agreement also includes stricter production standards related to climate change that will require commitments—from Brazil in particular—to enforce environmental protections of the Amazonia. This paper will assess the impact of the EU-MERCOSUR trade agreement on global agricultural trade and the competitiveness of U.S. agricultural exports going forward. The United States exports over $15 billion annually in agricultural products to the EU and competes with MERCOSUR in the EU market. This paper will also assess the impact of the tariff reductions under the EU-MERCOSUR trade deal on U.S exports of soybeans, feeds, beef and beef products, ethanol, and tobacco.

Suggested Citation

  • Valdes, Constanza & Tsigas, Marinos, 2021. "European Union (EU) – MERCOSUR Trade Agreement: Implications for U.S. Exports and Market Shares," Conference papers 333267, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333267
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    References listed on IDEAS

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    1. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
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    International Relations/Trade; Marketing;

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