LATIN AMERICA — European lawmakers sent a trade agreement between the European Union and Mercosur to the EU Court of Justice for review in January. The European Union and Mercosur, a South American trade bloc that includes Brazil, Argentina, Uruguay, and Paraguay, advanced the agreement in May.

The trade agreement includes provisions to cut tariffs on hundreds of goods. It also contains commitments for member nations to uphold democratic institutions and to remain within the Paris climate agreement. Bolivia is expected to join Mercosur in the coming years.

Larissa Wachholz, a former Brazilian official, stated that recent shocks have triggered "a very important moment of change" in Brazilian trade policy. Wachholz added, "I don't see that going back to hundred percent protectionism." Roberto Jaguaribe, a former Brazilian trade official and diplomat, commented that unpredictable relations with the United States "tends to lead to seeking additional partners to make up for that."

Assja Schymura, a distiller, remarked on the potential for growth. "I think growth will be immense," Schymura said. She added, "If we can only get over these initial barriers."

Why It Matters

The trade agreement between the European Union and Mercosur could alter economic relationships between the two blocs by reducing tariffs on numerous goods. The commitments within the agreement regarding democratic institutions and adherence to the Paris climate agreement establish expectations for governmental conduct and environmental policy among member nations. The advancement of this agreement to the EU Court of Justice indicates a progression toward its potential implementation, which could affect trade dynamics and international partnerships for Brazil and other Mercosur members.