Mercosur: lowering barriers and new economic opportunities in the EU and LATAM

Ventajas del acuerdo Mercosur

Mercosur: lowering barriers and new economic opportunities in the EU and LATAM

Mercosur

The signing of the trade agreement between Mercosur and the European Union (EU) represents a significant step towards the integration of two of the world’s most dynamic economic zones. Beyond the reduction of trade barriers, this pact creates an environment conducive to new business structures, fosters economic cooperation and strengthens business relations between the two regions.

Advantages of the Mercosur-EU agreement

Mercosur, which includes Argentina, Brazil, Paraguay and Uruguay, is a strategic gateway to the Latin American market. This agreement with the EU not only reduces tariffs, but also simplifies regulatory processes and facilitates bilateral trade.

The advantages include:

  • Expanded access: European companies will be able to enter key Mercosur markets without facing high tariffs, improving competitiveness.
  • Bilateral opportunities: companies from both regions will have a more transparent framework for doing business, promoting strategic partnerships. The agreement also offers unique opportunities for small and medium-sized enterprises (SMEs), which represent the economic engine of both regions. In addition to exporting, SMEs will be able to:
    • Expand their physical presence: the reduction of barriers facilitates the installation of offices, plants and distribution centers in the other region.
    • Encourage business partnerships: this framework encourages strategic alliances between European and Latin American companies, strengthening the transfer of knowledge and technology.
    • Taking advantage of local incentives: in Argentina, the RIGI (Régimen de Incentivos para Grandes Inversiones) program also indirectly benefits SMEs. On the one hand, large international companies take advantage of it to make investments of more than US$ 200 million and, on the other hand, SMEs can take advantage of these large companies to obtain contracts and develop there.

Impact on the creation of new economic structures

The agreement is not only about trade, it also drives the construction of more interconnected economic ecosystems. The lowering of barriers generates:

  1. Transcontinental investments: companies from both blocs seek to establish a local presence to serve expanding markets.
  2. Supply chain diversification: access to inputs, services and technologies in both regions creates more robust value chains.
  3. Strengthened international cooperation: with harmonized regulatory frameworks, countries can collaborate in areas such as digitalization, sustainability and industrial development.

Argentina: a key market

Argentina, a key Mercosur market, is going through a period of economic improvement with measures such as RIGI, which provides incentives for significant investments. In addition, the focus on macroeconomic stability and the interest in attracting foreign capital create a fertile environment for SMEs to explore and establish sustainable businesses.

The Regime of Interest for Large Investments (RIGI) in Argentina has become a valuable instrument for European companies interested in establishing or expanding in the country. This registration allows companies to obtain tax and financial benefits that complement the advantages of the Mercosur-EU agreement. By registering, companies can strategically position themselves to take advantage of the opening of the market.

Mercosur - Argentina

How Biznelp can help you

Our expertise in internationalization goes beyond reducing barriers. We help companies to:

  • Analyze key markets: we identify specific opportunities in high potential sectors.
  • Implement local strategies: from establishing physical presence to forming strategic alliances.
  • Ensure regulatory compliance: manage complex regulations in both regions to facilitate frictionless entry.
  • Facilitate the presence of foreign companies in Argentina: We offer a subsidiary management delegation service called EasySubsidiary that allows foreign companies to focus on their core business. We take care of all local processes (HR, finance, tax, compliance, etc.) to smooth out the complexities created by local idiosyncrasies.

In short, the Mercosur-EU agreement is a window of opportunity to revitalize trade between the two regions. While there are challenges to overcome, the potential of this pact for key sectors such as industry, services and food is undeniable. With the right improvements and a focus on collaboration, the agreement could become a model for win-win economic integration.

At Biznelp, we make it easier for companies to take advantage of these new opportunities by solving the obstacles generated by local idiosyncrasies so that these opportunities translate into benefits for our clients.

Are you going to let this opportunity slip away without analyzing if your company could benefit from it?

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