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EU apparel, footwear firms to gain in Mercosur FTA: Ceres

21
Nov '19
Pic: Shutterstock
Pic: Shutterstock
Footwear and apparel companies in the European Union (EU) can save up to €4 billion annually, apart from getting access to 800 million consumers in South America’s Mercosur bloc, when the EU-Mercosur free trade agreement (FTA) comes into force after a few years, according to Guillermo Tolosa, executive director of Uruguayan economic think tank Ceres.

After 20 years of negotiations, the EU and the Mercosur nations—Argentina, Brazil, Paraguay and Uruguay—arrived at an initial FTA last June.

The tariffs paid by the EU footwear and apparel companies are 43 per cent and 35 per cent respectively, while South American exporters are paying 10 per cent tariff to access the European market, said Tolosa, who thinks the final approval of the deal might take up to two years.
Factors like labour and environmental protection could lead to further delay in the final approval.

The agreement is likely to benefit European nations to tap new customers and the South American brands to get access to the world’s largest single market. The smaller brands in South American region, however, are likely to face some struggle in the competitive market, according to European media reports.

The Mercosur nations have 15 years and EU has a 12-year period to completely eradicate the duties.

Fibre2Fashion News Desk (DS)


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