EU-Mercosur Trade Deal: Political Significance Over Economic Gains

Brazilian Finance Minister Fernando Haddad emphasized the political importance of the EU-Mercosur trade deal, advocating for a broader view beyond just economic gains. While economic benefits are minimal, the agreement offers a strategic alternative in a polarized global setting, essential amidst U.S. tariff uncertainties.

Brazilian Finance Minister Fernando Haddad urged the European Union to consider the political importance of its trade agreement with Mercosur, rather than focusing solely on economic outcomes. Speaking at a conference in Paris, Haddad highlighted that while the economic benefits for Mercosur are minor, the political value is significant for both parties.

In December, the EU and Mercosur concluded a free trade deal that could save around 4 billion euros in tariffs annually. However, the agreement still requires approval from EU member countries like France and Italy, which have shown resistance. The deal could offer an alternative for the blocs amid uncertainties related to U.S. tariffs.

Haddad argued that advancing multilateralism is the best response to the current global multilateralism crisis, with the Ministry of Finance dedicated to contributing to a successful COP30 climate summit in Brazil this November. This summit aims to restore the centrality of multilateralism on the world stage.

(With inputs from agencies.)