Mercosur-EU trade deal may help ease investment flows

The free-trade deal struck between South American trade bloc Mercosur and the EU may spur investment and growth, according to initial comments on the historic trade deal.

Negotiations concluded on Friday in Brussels.

Mercosur comprises regional powerhouses Argentina and Brazil as well as neighbors Paraguay and Uruguay – both relatively small economies.

The Mercosur-EU agreement was 20 years in the making. Earlier attempts to strike a trade deal had always failed due to sensitive areas such as agriculture and industrial production.

ARGENTINA

Argentine foreign minister Jorge Faurie said: “Mercosur-UE is much more than a commercial agreement: it constitutes strategic progress in terms of Argentina’s position on the international stage which reinforces the commercial plans of our country and our bloc.

"It is a true milestone for our foreign policy and for the international insertion of Argentina because inclusive growth and development cannot be achieved in isolation, rather with more and better international trade based on rules."

Energy

Luciano Codeseira, partner and director at consulting firm Gas Energy Latin America, told BNamericas the deal may help spur the flow of capital and reduce red tape.

“It’s difficult to judge at this point, but based on the details that have come out so far, there’s nothing concrete in terms of energy,” Codeseira said. “It could facilitate the transmission of foreign direct investment in the whole regional economy. The only thing that could impact the sector is that.

“Energy doesn’t seem to be at the heart of the deal, it seems the agricultural and transport sectors are.”

URUGUAY

Along with Paraguay, Uruguay is among the smallest economies in the region.

Uruguay’s deputy finance minister, Pablo Ferreri, said the deal – because it is with a major bloc - could see the country receive much bigger investments from European firms.

“Obviously, the Uruguayan internal market is very small, but the legal security and the conditions of our country, when such an important market is opened, make Uruguay much more attractive in terms of investing," Ferreri said.

PARAGUAY

Paraguay’s President Mario Abdo said the accord presents greater market and economic growth opportunities for the Mercosur nations.