EU-Mercosur trade deal: European paper industry pushes for rapid ratification

The Confederation of European Paper Industries (Cepi) is urging the European Parliament to ratify of the EU-Mercosur Partnership Agreement (EMPA), emphasizing its potential to eliminate tariffs and non-tariff barriers, as well as foster growth for European pulp and paper companies, which are some of the strongest exporters among EU manufacturing sectors.

The agreement, signed by EU and Mercosur representatives on January 17 in Paraguay, aims to remove tariffs on over 90% of goods exchanged between the economic unions, including eliminating tariffs on 85% of pulp and 90% of EU paper and board exports to Mercosur. 

The deal with the South American bloc (Argentina, Brazil, Paraguay, and Uruguay) will create the world’s biggest free trade zone, covering a market of over 700 million consumers. 

Earlier this month, the European Council adopted two decisions authorizing the signature of the EMPA and the Interim Trade Agreement (iTA) between the EU and Mercosur.

The council says the agreements mark an “important milestone in the EU’s long-standing relationship with Mercosur partners.” 

Jori Ringman, Cepi’s director general, says: “The European pulp and paper industry believes in free trade and fair competition principles, but not only. We do not compromise on our sustainability principles and prefer to trade and compete with players who abide by the same climate, environmental, and social rules that we do.”

“Europe’s pulp and paper sector remains a strong exporter. We advocate for rules-based trade and reliable partnerships to remain the standard in the dynamic and fast-moving global trade landscape.”

The agreements aim to establish a framework for political dialogue, cooperation, and trade relations.

The contracts will require the consent of the European Parliament before they can be formally concluded by the council. The EU member states also need to ratify the EMPA before it can enter into force.

EU-Mercosur partnership 

The EU is Mercosur’s second-largest partner in trade in goods, accounting for almost 17% of Mercosur’s total trade in 2024, according to data provided by the council.

In that year, the EU’s trade with Mercosur was reportedly worth over €111 billion (US$130 billion): €55.2 billion (US$64.5 billion) in exports and €56 billion (US$65.5 billion) in imports, with the trade in goods between the two blocs growing by over 36% from 2014.

The EU-Mercosur deal has the potential to fix a currently uneven competitive paper and pulp industry landscape.The agreement opens new markets for European producers, which Cepi says have been in an imbalanced trade relationship with their South American counterparts. 

“Since 2004, the EU has maintained zero import tariffs on pulp, paper, board, and related products, including those from Mercosur nations. In contrast, Mercosur countries have imposed high tariffs on European exports, creating an uneven competitive landscape,” says the industry association.

“Given that the EU has already removed its tariffs for more than 20 years, the agreement should not lead to any significant surge in pulp and paper imports from Mercosur countries.”

EU-Mercosur exchanges of pulp and paper remain particularly crucial amid tense commercial ties between the EU and the US.

“Europe is a net exporter of high-quality paper and board products globally, but it is also a significant importer of market pulp from the Mercosur region, an important raw material in papermaking,” notes Cepi.

The agreement reportedly includes a strengthened Trade and Sustainable Development (TSD) chapter with a legally binding annex. The annex entails commitments to halt deforestation and enhance cooperation on sustainable supply chain development. 

Cepi asserts the importance of strict implementation and enforcement of the TSD chapter to ensure that environmental and labor standards are upheld. Both Europe’s pulp and paper industry and the Brazilian forest industry have already committed to preventing illegal logging and deforestation.

EU Parliament urged to act 

The iTA reflects the trade and investment liberalization pillar of the EMPA and will reportedly function as a standalone agreement until the full EMPA enters into force. Its objective is to deliver the economic benefits of the negotiated trade commitments as early as possible.

The agreement offers tariff reductions and opens access to new markets for various goods and services. Key sectors such as agriculture, automotive, pharmaceuticals, and chemicals will benefit from improved trade terms. 

The iTA falls within the EU’s exclusive competence and therefore does not require ratification by individual EU member states. The iTA will cease to apply once the EMPA enters into force.

Together, the provisions aim to strengthen cooperation in areas such as sustainable development, environment and climate action, digital transformation, human rights, mobility, counter-terrorism, and crisis management. 

Meanwhile, a group of European business associations has voiced its support for the free trade agreement in a joint statement, saying it is now up to the European Parliament to ensure rapid ratification. 

“We call on MEPs to give their consent and allow Europe’s engine of economic growth and prosperity to be switched on and move ahead decisively. After over 25 years of negotiations, we are finally in sight of the finish line. We cannot afford to wait any longer.”