The EU-Mercosur agreement took 25 years of negotiations. However, to assess this agreement, it is necessary to first see and evaluate the agreement in the light of, on the one hand, a deeper reflection and analysis concerning the evolution of humanity and the world in general and, on the other hand, a thorough study and evaluation of the data that are to be utilized at the present time.
For example, with regard to the latter, in the US tariffs imposed on Europe that entail a certain cost, this cost should be specifically determined, as well as the impact on millions of consumers. In this case, concerning inelastic goods, this is a rather forced purchase process to satisfy their basic needs and not as a result of free choice on the part of consumers.
As for the former, regardless of tariffs, the internationalization of the economy and the rapid population growth have created new dynamic groups of consumers, who are knowledgeable, highly suspicious and demanding. They are also consumers who have suffered income cuts and focus primarily on the price criterion.
Europe has therefore made the right decision in a troubled business environment, opening the door for several businesses in a large market. For Greece, the benefits are in a context of competition in the agricultural sector and livestock farming, as well as the benefits to arise for high-quality Greek products, shipping and transport, taking into account the small footprint Greece has in the Mercosur countries. Tariff reduction will concern food, medicines, cosmetics, shipping and logistics. The agreement also creates a protective ring in Latin American trade for Greek branded products, such as feta cheese and olive oil.
As to Greece’s slice of the productive economy, it is necessary to reposition it in connection with the necessity of changing our economic model – a subject of a broader discussion for several years. However, global developments constitute accelerating factors for the intensification of the Greek economy in this direction, as it is not enough for Greece to simply aspire to produce and sell only in the domestic market, often at high prices.
Antonis Zairis is a business administration professor and a member of the American Economic Association.
