It’s a broad statement that reflects the wishes of the European side, and above all France, in embedding climate concerns into the deal — especially keeping in mind the threat by Argentinian President Javier Milei, made after Donald Trump’s U.S. presidential election win, to pull out of the Paris accord.
Importantly, the agreement allows for the trade agreement to be suspended, in part or in full, if one party finds, on a factual basis, that the other has violated essential obligations under the Paris accord. The wording foresees “urgent consultations” on seeking a mutually agreed solution, and a review period, before any suspension can go into force.
The parties also make a fulsome pledge to tie trade to sustainable development in an annex which notes that the agreement is being signed “amidst an unprecedented combination of crises and challenges.” This declaratory annex does, however, specify that each party to the agreement is responsible for determining its own sustainable development priorities.
– Auto duties
The Mercosur import tariffs on cars will take anywhere from 18 to 30 years to be reduced to zero. Argentina and Brazil, the two largest economies in the Mercosur bloc, will have higher tariff levels than Paraguay and Uruguay.
EVs and hybrids will be the quickest to see their rates lowered, with a first 29 percent reduction as the deal enters into force. That means, for instance, that Argentina and Brazil will charge only 25 percent on European EVs and hybrids. The tariffs will then decline to 5 percent after 15 years and finally zero after 18 years.
