According to media reports, two months after the historic free trade agreement between the EU and Mercosur entered into temporary force on May 1, the EU unexpectedly imposed import quotas on finished steel products from South America, violating an earlier agreement for unspecified reasons.

Quotas apply to finished steel products from South American countries (Mercosur) After the two blocs signed a historic free trade agreement on January 17 this year.

The violation of the agreement was committed without prior negotiations with Mercosur members Argentina, Brazil, Paraguay and Uruguay, or with associated countries Bolivia, Chile, Colombia, Ecuador and Peru.

According to local press reports, the EU has granted Brazil an annual quota of 227,000 metric tons of finished steel products, while slabs and billets will still not be taxed on imports.

Valor newspaper quotes Marco Polo Melo Lopez, executive president of the Brazilian Steel Institute. Economico reports that "negotiations are still ongoing, as the EU proposal is unsatisfactory and requires adjustments to product categories."

The trade agreement is important because it creates one of the largest free trade zones in the world, linking the EU with the South American bloc of countries, which is home to more than 700 million people.

The initial interim agreement, which is still subject to legal review by the European Court of Justice, aimed to reduce or eliminate tariffs on 90% of bilateral trade in goods, expand EU access to crucial minerals such as lithium, and included a mechanism to protect sensitive goods. The agricultural sector, as well as ensuring the social protection of European farmers.

Author: Stilorbis

Steelorbis.com