Austria's industry in terms of optimism: Does the Mercosur Agreement make the difference?

Austria's industry in terms of optimism: Does the Mercosur Agreement make the difference?

The Mercosur Agreement could offer an important impulse for the Austrian industry. More than 1,400 Austrian companies maintain business relationships with the four Mercosur countries, with over 260 companies maintaining branches on site. By lowering tariffs to European exports, the export of EU industrialists could increase by up to 94 percent, which would result in annual savings of four billion euros for EU companies. Neumayer emphasizes that the agreement is well developed and could contribute to creating new jobs and prosperity in Austria.

advantages for the Austrian economy

The Mercosur Agreement is not only regarded as an economic measure, but also as a geopolitical necessity. It offers significant advantages not only for domestic companies, but also for international climate protection. According to wko.at , important raw materials such as mineral fabrics, rare earths, skins and skins and soy are imported at cheaper prices. This could significantly strengthen the Austrian industry, especially the leather industry.

Another important aspect of the agreement is the extended protection of the rainforest with additional instruments. The planned legal acts, including the EU renovation regulations and the supply chain law, are intended to help to achieve the sustainability goals, while EU standards for food safety, animal and plant health are preserved. The reduced customs pollution to 91 percent of the goods is classified as an opportunity for Austria's export management after two years of recession. This could benefit small and medium-sized companies (SMEs) in particular, 65 percent of which are active with the Mercosur countries.

market analysis and international challenges

Negotiations on a free trade agreement between the EU and the Mercosur countries, which include Argentina, Brazil, Paraguay and Uruguay, have taken place for over 25 years. These negotiations were often made more difficult by the conflict between the interests of EU carmakers and farmers, a topic known as "Cars Against Cows". On December 5 and 6, 2024, EU Commission President Ursula von der Leyen and the President of the Mercosur countries signed the agreement, despite resistance from countries such as France and Poland. However, the approval of the EU Council and the EU Parliament is still pending and critical voices of non-governmental organizations regarding environmental protection and employee rights are according to Wirtschaftsdienst.eu unmistakable.

In cases in which the agreement fails, the WTO rules remain in force that allow Mercosur exports to the EU. An analysis shows that both sides would benefit from liberalization, with the Mercosur countries generally more profit. It can be expected that Paraguay and Uruguay within Mercosur will pull more benefits from the agreement than Brazil and Argentina. However, in order to be able to fully exploit the advantages of the agreement, the EU members must overcome internal dissonances and agree on a common line.