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The EU delays the signing of Free Trade Agreements with LATAM.

The European Union has postponed the approval of a Free Trade Agreement with Mercosur and the modernization of another FTA with Mexico, as integration progresses from three major trade agreements already in force and on a large scale.

In April 2020, the European Union and Mexico concluded technical negotiations on public procurement, which were the only outstanding issues following the 2018 agreement in principle on the trade part of the modernized Comprehensive Agreement between the European Union and Mexico.

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However, since then, both parties have not signed the new pact, which is the prerequisite for initiating the ratification process.

On the other hand, on June 28, 2019, the European Union and Mercosur (comprised of Brazil, Argentina, Uruguay, and Paraguay) reached an agreement in principle, which has not been signed, on a FTA between them, outlining the negotiation balance in broad strokes.

In contrast, on December 13, 2023, Chile became the first country in the region to sign a new-generation agreement with the EU, the Advanced Framework Agreement (AFA).

Building on the existing partnership, the new Agreement enhances the framework of our bilateral relationship. It deepens political dialogue, cooperation, and economic relations while addressing new challenges and priorities such as climate action or digitalization.

With articles dedicated to democratic principles, human rights, sustainable development, and gender equality, among others, the agreement places shared values at the core of EU-Chile relations.

It also promises to further deepen and diversify EU-Chile trade and investment relations, for example, by eliminating over 99% of export tariffs.

However, the European Union will eliminate tariffs on 100% of industrial goods imported from Mercosur during a transition period of up to 10 years.

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Ignacio Teson
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
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