As a member of Mercosur, Argentina is also a party to the EU-Mercosur Framework Agreement on Trade Cooperation signed in 1995, which contains provisions on trade cooperation. Argentina participated in the negotiations of the EU-Mercosur Association Agreement. At the end of April, Argentina announced to its Mercosur partners, Brazil, Paraguay and Uruguay, that they would withdraw from trade negotiations already concluded with the European Union and the European Free Trade Association. This unilateral decision caused shockwaves on the part of Mercosur, as it implied a possible dissolution of the trading bloc. However, Argentina`s decision was later overturned and Mercosur`s partners are now considering how they can make progress despite each country`s competing priorities. Although Brazil, Uruguay and Paraguay are interested in new trade agreements with other countries such as Canada, South Korea and Singapore, the von Fernandez government has reversed Argentina`s liberal stance and does not support the idea of new trade agreements. The agreement was denounced by European cattle farmers, environmental activists and indigenous human rights activists.   There have been protests against the agreement.   Governments and parliaments of EU member states have also criticised the agreement. In October 2020, the European Parliament  and EU Trade Commissioner Valdis Dombrovskis  declared that the EU-Mercosur agreement “cannot be adopted in its current form”. According to Jonathan Watts, “the negotiations lasted nearly two decades, which may explain why the result signed last week reflects the industry-friendly values of the past rather than the environmental concerns of the present.”  According to an editorial in the Irish Times, “EU countries are committed to achieving net zero carbon by 2050, but this will not be significant if the world`s largest carbon sink is destroyed.”  Former French environment minister Nicolas Hulot condemned the agreement in an interview with Le Monde, saying it was “totally contradictory” to the EU`s climate targets and warned that it would further destroy the Amazon rainforest.
 The Financial Times expressed concern that “the EU-Mercosur agreement will not nullify climate efforts”.  The EU is Argentina`s second largest export market (after Brazil). Argentina`s exports to the EU are mainly agricultural goods and other primary goods. In exchange, the EU exports less goods to Argentina (representing a deficit of 3.4 billion euros for the EU), but it has a surplus of services of 0.4 billion euros. As Argentina`s largest foreign investor, the European Union accounts for half of Argentina`s foreign direct investment.  The EU as a whole is Argentina`s largest cooperation partner, the largest investor and its second largest trading partner, with a trading volume of 18.1 billion euros.  Mercosur is formally a customs union. While a free trade agreement implies an obligation between countries to respect lower tariffs and other trade rules that provide preferential market access, a customs union adds a common external tariff on imports into the bloc and a commitment by its four members to negotiate trade agreements with third countries.Share