ZEW President Achim Wambach on the Mercosur Agreement

The Mercosur Agreement aims to reduce tariffs and facilitate market access. The EU is currently working towards a conclusion and is negotiating additional protection and sustainability commitments. ZEW President Professor Achim Wambach, PhD explains:

“Europe is under pressure in terms of trade policy, caught between US protectionism and Chinese industrial policy. That is precisely why it is right for the EU to push ahead with the Mercosur Agreement now. Mercosur would open up new sales opportunities for European companies, broaden supply chains and increase Europe's economic weight in a geopolitically fragmented world. In this regard, Europe is a reliable trading partner: unlike in the US or China, where trade policy measures can be imposed at short notice for political reasons, arbitrary interventions are almost impossible in the EU. The rule of law and rule-based procedures ensure predictability for companies and partner countries.

What is often considered a weakness of the EU, namely its lack of strong leadership, proves to be a strength, because decisions are more broadly legitimised, more stable and less volatile.

The agreement would not only strengthen Europe as a business location, but also send a signal in the competition between economic systems in favour of reliable, rule-based trade.”