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EU-Mercosur FTA: Mercosur’s response to the EU joint instrument (Sep 2023)

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EU-Mercosur FTA: Mercosur’s response to the EU joint instrument (Sep 2023)

We refer to the draft Joint Instrument submitted by the European Union (EU) in March 2023. MERCOSUR and its State Parties reaffirm the commitments adopted under the Trade and Sustainable Development chapter already agreed as a part of the birregional Association Agreement (AA).

MERCOSUR and its State Parties believe they are uniquely placed, alongside the European Union and its Member States, to lead by example in the integration of trade and sustainable development insofar as this is pursued in a collaborative manner.

MERCOSUR and its State Parties are ready to work towards a quick finalization of the negotiation of the AA with the European Union. In order to achieve such goal:

• We should aim to build upon the 2019 negotiated text, in the context of new circumstances of the global economy and the strategic value of this agreement.

• We are willing to negotiate a trade and sustainable development joint instrument, taking into account the Parties’ domestic legislation and in light of different national circumstances. Such instrument should contribute to reinforce the sustainable development in its social, economic and environmental dimensions. There should be no sanctions (or even hinting at the application of sanctions) embodied in the document and Parties shall avoid the use of measures aimed at achieving sustainable development as an unjustified or unnecessary obstacle to trade. The instrument needs to be based on a cooperative approach.

• Given that the AA is being negotiated amidst an unprecedented combination of challenges—climate change, food insecurity, health emergency, geopolitical tensions, and persistent inequalities within and among countries—, the AA should safeguard the state capacity to put in place public policies regarding, among others, (i) public health; (ii) science, technology and innovation; (iii) sustainable, safe and resilient interregional value chains in energy transition, sustainable mobility and digitalization; and (iv) climate action and food security.

• The AA should foresee cooperation activities—including the required funding— with a view to, inter alia, (i) build capacity enabling vulnerable sectors to tap into the benefits of the agreement; (ii) assist producers and exporters willing to comply with import requirements; and (iii) promoting sustainable production initiatives, in accordance with domestic legislation. The Agreement should be a valuable tool to promote the integration of sustainable value chains.

• The AA should be equipped with a mechanism to rebalance trade concessions negotiated under the AA if these concessions are suspended or nullified as a result of domestic EU legislation.

MERCOSUR and its State Parties believe that the swift conclusion of the AA negotiations would send an unequivocal contribution to address the aforementioned challenges and send a strong signal to the international community of unity and collaboration between two regions of the world that share the same set of values.