Study Analysis of the agreement between the European Union and the Mercosur By Dr. Luciana Ghiotto and Dr. Javier Echaide CONTENT 0. FOREWORD ................................................................................................................................................................5 1. INTRODUCTION ........................................................................................................................................................6 1.1 Talks conclude: The June 28 announcement ......................................................................................6 1.2 The longest trade negotiations in the world .......................................................................................8 1.2.1 The evolution of the negotiation ......................................................................................................9 1.3 Notes.................................................................................................................................................................... 14 2. THE TRADE PILLAR ............................................................................................................................................. 16 2.1 An overview of the bilateral trade relationship ............................................................................. 16 2.2 Reduction of tariffs on industrial goods ............................................................................................. 20 2.2.1 The impacts on the automotive sector ....................................................................................... 22 2.3 Agricultural goods ........................................................................................................................................ 24 2.3.1 Analysis of liberalisation of agricultural goods ..................................................................... 27 2.4 Other measures in the Trade in Goods Chapter ............................................................................. 34 2.4.1 Elimination of export duties ........................................................................................................... 34 2.4.2 Bilateral Safeguard Measures ......................................................................................................... 34 2.5 Rules of Origin (RO) ..................................................................................................................................... 35 2.5.1 Non-originating materials ................................................................................................................ 36 2.5.2 Fishing ....................................................................................................................................................... 38 2.5.3 Certification of Origin ......................................................................................................................... 41 2.6 Notes.................................................................................................................................................................... 42 3. TECHNICAL BARRIERS TO TRADE............................................................................................................... 47 3.1 Technical Barriers to Trade: definitions ............................................................................................ 47 3.1.1 Chapter on Technical Barriers to Trade .................................................................................... 49 3.1.2 Customs and Trade Facilitation ..................................................................................................... 50 3.1.3 The effects of Trade Facilitation and TBT in the agreement ........................................... 52 3.2 Chapter on Sanitary and Phytosanitary Measures ........................................................................ 53 3.3 Chapter on Dialogues .................................................................................................................................. 55 3.4 Impacts of the SPS and Dialogue Chapters ....................................................................................... 58 3.5 Notes.................................................................................................................................................................... 62 4. TRADE AND SUSTAINABLE DEVELOPMENT .......................................................................................... 64 4.1 Trade, Climate Change, Biodiversity, and Forests ......................................................................... 64 4.1.1 Impacts of trade on deforestation and climate change ...................................................... 66 1 4.1.2 The general effects of the agreement on the environment .............................................. 69 4.2 Labour Standards .......................................................................................................................................... 73 4.3 Technical and Scientific Information ................................................................................................... 75 4.4 Responsible management of supply chains ..................................................................................... 76 4.5 Dispute settlement in the context of Trade and Sustainable Development...................... 77 4.6 Notes.................................................................................................................................................................... 79 5. SERVICES .................................................................................................................................................................. 82 5.1 Mobility of Business People ..................................................................................................................... 84 5.2 Licences and Regulatory Framework .................................................................................................. 84 5.3 Financial Services .......................................................................................................................................... 85 5.4 Capital Movement ......................................................................................................................................... 85 5.5. Electronic Commerce ................................................................................................................................. 87 5.6 Notes.................................................................................................................................................................... 90 6. PUBLIC PROCUREMENT .................................................................................................................................... 91 6.1 Analysis of the Public Procurement Chapter ................................................................................... 91 6.2 What does the opening up of public procurement imply? ........................................................ 93 6.3 Other examples of how the agreement could impact on public procurement ................ 94 6.3.1 Airports ..................................................................................................................................................... 94 6.3.2 Medicines ................................................................................................................................................. 95 6.3.3 Public universities................................................................................................................................ 96 6.4 Notes.................................................................................................................................................................... 97 7. INTELLECTUAL PROPERTY ............................................................................................................................. 99 7.1 Patents on Medicine ..................................................................................................................................... 99 7.2 Plant varieties .............................................................................................................................................. 101 7.3 Geographical Indications (GI) .............................................................................................................. 102 7.4 Copyrights and Trademarks ................................................................................................................. 105 7.5 Concluding Remarks ................................................................................................................................. 106 7.6 Notes................................................................................................................................................................. 107 8. OTHER RELEVANT ISSUES............................................................................................................................ 109 8.1 Small and medium enterprises (SMEs) ........................................................................................... 109 8.2 State Companies ......................................................................................................................................... 110 8.3 Dispute settlement: mediation, arbitration, and codes of conduct ...................................