Argentina's Congress approves EU-Mercosur trade deal by huge majority

Argentina has become the latest nation to formally ratify the sweeping trade deal between the Mercosur regional trade bloc and the European Union.

A quarter of a century after talks began over a potential agreement, senators in Argentina’s upper house voted in favour of the accord by a huge majority: 69 votes in favour and just three against.

The main opposition Peronist caucus had already indicated it would back the deal.

The lower house Chamber of Deputies greenlit the deal earlier this month with cross-party backing, earning 203 votes in favour to 42 against.

Congressional sign-off of the deal – which would create a market of some 700 million consumers and represents around a quarter of global GDP – will strengthen Argentina’s international standing and open up new export markets. 

President Javier Milei’s government hailed the milestone, though celebrations were tempered by the news that Uruguay beat Argentina to the punch – its lawmakers had approved the deal barely an hour earlier.

The government had hoped Argentina would be the first Mercosur nation to ratify the treaty after 25 years of complex negotiations and multiple setbacks.

At one point during Thursday’s debate, Senator Maximiliano Abad (UCR) even tried to bring the vote forward so as not to “lose” to Montevideo.

The deal

The EU–Mercosur deal was formally inked on January 17 in Asunción at a ceremony attended by President Milei and his counterparts from Paraguay, Santiago Peña, and Uruguay, Yamandú Orsi. Brazil’s President Luiz Inácio Lula da Silva did not attend.

According to its promoters, the agreement would remove tariffs on 92 percent of Mercosur exports, grant preferential access to a further 7.5 percent and reduce barriers to entry for industrial goods from Europe.

Tariffs on chemicals, pharmaceuticals, machinery, clothing and beverages would, among other measures, be eliminated.

The European Union is Mercosur’s second-largest trading partner after China and ahead of the United States. It is also one of the principal sources of foreign direct investment and the world’s second-largest importer of goods.

Speaking for the ruling party, Senator Francisco Paoltroni of Formosa welcomed the signing of the agreement, arguing that it would strengthen the export profile of minerals, hydrocarbons and regional economies.

“The long-awaited day for our country has arrived. After 25 years under discussion, today this EU–Mercosur agreement will become law. It marks a path towards development for our republic and for the long-neglected heartland,” Paoltroni said during the debate.

“I believe that getting the energy, hydrocarbons and mining sectors moving will help Argentina’s hard-pressed agricultural sector generate the foreign currency our country has always lacked,” added the La Libertad Avanza senator.

Uruguay first to approve

Earlier in the day, Uruguay became the first country to ratify the mammoth trade deal. 

Lawmakers in the nation’s lower house approved the deal by 91 votes to two, following its approval by the Senate. The agreement has been fiercely opposed by farmers in some EU countries.

Brazil and Paraguay have already begun the process in their respective parliaments to ratify the agreement.

The deal the EU signed with the four members of the Mercosur bloc in January, after a quarter-century of negotiations, creates one of the world’s largest free-trade areas.

It would allow the EU to export more vehicles, machinery, wine and spirits to Latin America. In return, South American producers of meat, sugar, rice, honey and soybeans would gain easier access to one of the world’s largest economies.

It still requires approval from lawmakers in the European Parliament, which has referred it to the EU’s top court.

The European Union could decide to implement the deal provisionally while waiting for the court’s ruling, but it has not yet made a decision.

South American countries that pushed hard for the deal are pressing ahead with ratification regardless of the European legal challenge.

Uruguayan Foreign Minister Mario Lubetkin hailed its ratification as a “historic” step and “a signal” to Europe, which South American leaders have accused of foot-dragging.

Some EU nations, such as Germany and Spain, are enthusiastic about the pact, which could boost exports at a time of global trade tensions.

European Commission chief Ursula von der Leyen pushed hard for the deal, as did Brazilian President Luiz Inácio Lula da Silva.

France, however, unsuccessfully tried to block the agreement over concerns for its farmers, who fear being undercut by a flood of cheaper goods from Brazil and its neighbours.

Iglesias gets the nod

In their first activity of the day, Argentina’s senators also approved the nomination of former PRO deputy Fernando Iglesias as the nation’s ambassador to Belgium and the EU.

The upper house voted 38 in favour, 31 against, with one abstention.

– TIMES/AFP/NA/PERFIL