Europe's ‘yes’ to Mercosur is a milestone for free trade
The vote is a positive sign for the industry – Austria’s stance against prosperity and 1.2 million jobs in the export sector is incomprehensible
Today’s vote in favor of the Mercosur Agreement has been met with great relief at the Federation of Austrian Industries (IV). “The fact that the agreement can be concluded despite the irresponsible actions of a few countries is fundamentally a positive signal for the European economy,” said IV President Georg Knill in an initial reaction. Negotiations on the agreement with Latin America have been ongoing for over 25 years; it provides for comprehensive tariff exemptions for EU exports and could increase European exports to the region by up to 39 percent. “Mercosur is a fair and well-negotiated agreement and a significant boost for our economy. It would have been appropriate for the Austrian government to send a signal to strengthen the export economy and economic development as a whole, rather than misjudging the opportunities and hiding behind old parliamentary resolutions,” said Knill.
Despite the positive vote, Austria’s stance on the Mercosur agreement is met with widespread incomprehension. “Austria’s industrial sector is marked by the longest recession since World War II, high inflation, and is currently stagnating. Austria’s stance on Mercosur is a slap in the face to the export-oriented economy, on which 1.2 million workers and their families depend. To deny Austria significant opportunities for value creation, investment, and prosperity due to petty special interests is more than incomprehensible,” comments Knill, adding: “Especially in times of economic challenges, letting opportunities slip away causes frustration in a country that largely depends on its international integration.”
Austria’s exports are currently declining. According to economists, the Mercosur agreement could offset up to 50 percent of the economic damage caused by U.S. tariffs in Austria. “It is clear that we cannot significantly influence U.S. trade policy. But we can certainly take advantage of opportunities like the Mercosur agreement, which creates stability and stands for rules-based trade,” Knill concluded.