A NEGOTIATIONS THAT OPENS MULTIPLE OPPORTUNITIES AND CHALLENGES
The agreement with the European Union and the productive transformation
by Félix Peña
English translation: Isabel Romero Carranza
The bi-regional agreement between Mercosur and the
EU will generate opportunities as well as challenges. The opportunities
would translate into investments, trade flows and job creation. They would
also manifest in a good image, even prestige, for the policies of international
integration of both regions and their countries, as well for those who
make them possible.
The challenges will be related to the ability that
the government, employers and society at large will need to have in order
to overcome the practical difficulties that will arise in the future.
Facing these challenges will require talent, political will and organizational
Based on the observation of previous experiences of
specific agreements of this type with the EU, there are four main steps
that would need to be taken so that the bi-regional agreement is effectively
concluded and enters into force.
The first step would be to make the text of the agreement
widely available to the public, especially its "fine print".
A second step would be to start the process of reaching a national consensus
so that parliamentary approval of the agreement is possible. The third
step would be to prepare, as a country, to effectively take advantage
of the agreement. The final and fourth step would be to promote, especially
within the so-called G8, i.e.: the joint action of the Mercosur and the
Pacific Alliance countries -, the articulation of the network of bi-regional
agreements that would exist with the European Union.
The negotiations between Mercosur and the European Union took 20 years
to finalize and 28 years have elapsed since the political decision was
taken to initiate such an unexpectedly long path. A new stage has opened
which, if successful, will lead to the full entry into force of the agreement
and, most importantly, to the effects sought in terms of trade and productive
During all those years, the idea of negotiating with the EU had the support,
even an enthusiastic one, of the successive governments of Argentina.
Thus, both Mercosur and the idea of partnering with the EU are examples
of our ability to generate agreements on strategic issues with long-term
effects. In both cases, however, it is still necessary to show a similar
capacity to translate the ideas into concrete actions.
A new stage in this journey has now begun. It could take two to three
years to conclude it. Only then would the agreement be effectively finalized
so that its effects permeate the realities of both regions (the texts
in their present state can be accessed on the website of the Argentine
Foreign Ministry, https://cancilleria.gob.ar/es/acuerdo-mercosur-ue).
The bi-regional agreement will generate opportunities as well as new
challenges. The opportunities would translate into investments, trade
flows and job creation, and would also bestow prestige on the policies
for international integration of both regions and their countries, as
well as on those who make them possible.
The challenges would be related to the capacity that the government,
employers and society at large will need to have in order to overcome
the practical difficulties that arise in the future. This will require
talent, political decision and organizational technology.
What actions would Argentina need to take -in a coordinated manner with
the Mercosur partners if necessary-so that the bi-regional agreement is,
in fact, concluded and becomes effective? Based on what has been observed
in other specific cases of agreements of this kind with the EU, it would
be necessary to take at least four main steps, without overlooking other
actions that may be necessary as well. Some steps would even need to be
The first step would be to make the texts, especially the "fine
print" of the agreement widely available to the public. In order
to analyze precisely what has been agreed, it will be necessary to study
the full texts and evaluate them from the point of view of the different
sectors involved, at national level and at the level of the different
provinces. Moreover, it will be necessary to review the texts and the
fine print considering the perspective of the dynamics of trade and investment
of the future. This will involve paying attention to the mechanisms that
would implicitly or explicitly allow to activate different modalities
of "escape valves" and, at the same time, those that would aid
in the development of an "assisted transition" for SMEs that
seek to reconvert in relation to the new expanded market. The latter were
applied at the time by the EU to facilitate the incorporation of Eastern
A second step would be to achieve a national consensus that would enable
the parliamentary approval of the agreement. This means explaining the
contents of the agreement with respect to its possible impacts on each
sector and in each province and, above all, clarifying what the effects
would be in the case that there was no parliamentary approval.
A "minor detail" to consider at this stage is that there is
a possibility that our country does not achieve parliamentary approval,
while the other countries of Mercosur do. We should bear in mind that
the idea of bilateral negotiations of Mercosur member countries with the
EU and with other relevant players in world trade, such as the US and
China, has been raised on several occasions. Depending on how it is interpreted
and applied, this idea could even mean the end of Mercosur.
A third step would be to prepare, as a country, to effectively take advantage
of the agreement. This should be a priority plan of action for the provinces,
especially in the perspective of the "productive transformation"
which will mean that the number of export companies will jump to 40,000,
mostly SMEs-as foreseen in the "Argentina
Exports" plan (see https://www.argentina.gob.ar/).
For companies and institutions, it would require preparing to compete
effectively in the European market, especially in "niches" where
they can have outstanding advantages. It would also involve training capable
specialists to improve the ability to understand how to operate successfully
in the European market, taking advantage of the benefits resulting from
the bi-regional agreement. Moreover, it would also be a priority field
of action for academic institutions, which would benefit greatly from
their inclusion in specialist training networks for the Mercosur and the
And a fourth step would be to promote, especially in the ambit of the
so-called G8-that is, the joint action of the Mercosur and the Pacific
Alliance countries- the articulation of the network of bi-regional agreements
that would exist with the EU, following the proposal advanced at the time
by Ricardo Lagos and Osvaldo Rosales from Chile. The accumulation of origin
would then be a fundamental instrument. In this respect, the LAIA would
provide the necessary institutional scope.
On the topics covered in this newsletter and the bi-regional negotiations
Mercosur-EU see the reference and the texts of 58 other articles published
by Félix Peña in recent years on https://eulacfoundation.org/.
- Acharya, Amitava; Buzan, Barry, "The Making of Global International
Relations. Origins and Evolution of IR at its Centenary", Cambridge
Univerisity Press, Cambridge 2019.
- Amstrong, Shiro, "The rule based economic disorder after Osaka
G20", East Asian Forum, 30 June 2019, en https://www.eastasiaforum.org/
- Bouzas, Roberto, "Ahora es el momento de evaluar la letra chica
de cada capítulo", diario "Clarín", Opinión,
29 de junio de 2019, página 12.
- Buzan, Barry; Lawson, George, "The Global Transformation. History,
Modernity and the Making of International Relations", Cambridge
Studies in International Relations, Cambridge University Press, Cambridge
- Días, Alejandro, "Ningún acuerdo funcionará
sin una transformación productiva", diario "El Cronista",
2 de julio 2019.
- Eisenman, Joshua, "China's geostrategic conception of the developing
world", East Asian Forum, 1 July 2019, en https://www.eastasiaforum.org/
- Elizondo, Marcelo, "Mercosur-UE: oportunidades laborales".
Diario "La Nación", 14 de julio 2019, en https://www.lanacion.com.ar/.
- Frandi, Nico, "WTO and Geopolitical Changes. Multilateralism
and Coalitions of Members among Crises, Adaptation to Change and Rebirth",
IAI - Instituto Affari Internationali, Documenti IAI 19/10 - May 2019,
- Frey, Carl Benedikt, "The Technology Gap. Capital, Labor, and
Power in the Age of Automation", Princeton University Press, Princeton
& Oxford, 2019.
- García Herrero, "Europa despierta del letargo", diario
"El País", 14 de julio 2019, en https://elpais.com/economia/.
- González, Anabel, "The EU-Mercosur Trade Accord Sends
a Signal to the World's Protectionists", PIIE - Peerson Institute
for International Economics, July 2, 2019, en https://www.piie.com/.
- Malamud, Carlos; Steinberg, Federico, "Acuerdo UE-Mercosur: ¿quién
gana, quién pierde y qué significa el acuerdo?",
Real Instituto Elcano, en http://www.nuevospapeles.com/.
- Mauvecin, Maximiliano, "Las regions subnacionales en el acuerdo
Mercosur-UE", Suplemento Comercio Exterior del diario "La
Naciòn", 12 de Julio 2019, en: https://www.lanacion.com.ar/.
- Mellado, Noemí, "Unión Europea-Mercosur: Marchas
y Contramarchas en la Asociación Birregional", Informe Integrar,
IIL-FCJS-UNLP, n° 117 - Julio 2019, en http://www.iil.jursoc.unlp.edu.ar/.
- Negroponte, Nicolas, "Being Digital", Vintage Books, New
- Pagni, Carlos, "Macri y Bolsonaro ahora miran hacia Estados Unidos",
diario "La Nación", 4 de julio 2019, página
10, en https://www.lanacion.com.ar/.
- Peña, Félix, "El camino a recorrer para empezar
la nueva relación comercial con la Unión Europea",
Suplemento Comercio Exterior del diario "La Nación",
4 de julio 2019, página 3, en https://www.lanacion.com.ar/.
- Pomeranz, Kenneth, "The Great Divergence. China, Europe and the
Making of the Modern World Economy", A Princeton University Press
E-Book, Princeton and Oxford, 2000.
- Ravier, Adrián, "Libre comercio e importación de
instituciones", diario "El Cronista", 1 de julio 2019.
- Schuster, Alberto, "Argentina en tres dimensiones", diario
"El Cronista", 2 de julio 2019.
- Solana, Javier, "El espíritu perdido del G20", diario
"El País", Opinión, 27 de junio 2019, página
13, en https://elpais.com/.
- Vicchi, Alejandro, "Mercosur-UE. Las preguntas que dejó
la firma del acuerdo", Suplemento Comercio Exterior del diario
"La Nación", 4 de julio 2019, página 4-5, en
Félix Peña Director
of the Institute of International Trade at the ICBC Foundation. Director
of the Masters Degree in International Trade Relations at Tres de Febrero
National University (UNTREF). Member of the Executive Committee of the
Argentine Council for International Relations (CARI). Member of the Evian
Group Brains Trust. More