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These are the leaders of Mercosur a group of south American countries. After 20 years, they signed a trade deal with the European union encompassing nearly 800 million people. The deal would remove 90% of tariffs between the two blocks, but even as it was being signed, the Amazon was on fire and farmers were in the streets. While the trade deal would bring economic benefits to both blocks under the surface, it's more than that. It's an attempt by both the EU and Mercosur to liberalize and reform sectors of their economy. While it was signed in 2019. It has yet to be ratified and some fear that it will fall victim to the protectionism and trade wars that have torpedo trade deals in the past decade. Mercosur is short for Mercado Comun del Sur or Southern common market. It's a free trade deal area comprise of Argentina and Brazil, which make up 95% of the block's economic output, as well as Paraguay and Uruguay. Most of the remaining countries of south America being associated members of Mercosur. Unlike the European union, which has a certain level of political integration Mercosur has focused mostly on regional trade integration. But in the past two decades, it has increasingly shifted to developing international partnerships. This new trade deal with the European union would be its largest international agreement to date. But it has not escaped controversy, particularly due to changes it would bring to two key industries, agriculture and manufacturing, European manufacturing still represents 15% of its economy. Despite the industrialization in the past decades, it's automotive, chemical and pharmaceutical manufacturing industries are continuously looking for new markets to expand a sector where Mercosur has high tariffs protecting its own industry. When looking at agriculture, the tables are reversed. Mercosur countries are very competitive thanks to the south American climate's large-scale ranching and farming and fewer labor and food regulations. Europe on the other hand has had a protectionist approach to agriculture with its common agricultural policy, a generous scheme of subsidies and regulation, which aims to secure Europe's food security, but costs nearly 40% of that use yearly spending the yearly EU exports to Mercosur account for less than half a percent of its total GDP. While Mercosur experts that you represent 2%. The opening up of the economies that it pushes for is also slow. It'll take 15 years after ratification, but the trade deal to fully enter into force and some sensitive sectors will stay mostly off limits. This means that agricultural products like beef and poultry, but also commodities like sugar and honey and rice will still have quotas limiting how much of them will actually enter the market. If we look at beef, which has proven to be one of the more controversial elements of the trade deal and makes room for another 99,000 tons to be imported terror free to the EU, this increased quota on your accounts for 1.2% of the use total beef consumption, which doesn't explain the opposition of the deal by European farmers yet looking under the surface tells a different story: this one percent of beef imports would be for the more expensive cuts of meat, which represents the largest share of income for beef farmers. On top of the existing quota for south American beef, it would bring the market share of Mercosur countries to 30% of all expensive cuts. One of the main reasons that the trade deal has been so controversial is that it is being used to reform protectionist sectors in both economies and Europe. It is an attempt to reform the CAP which is increasingly seen as an obsolete policy of the 20th century. By opening up European agriculture to outside influence that you hope to reform the sector to wean it off the subsidies it is used to. At stake is the freeing up of 40% of that you budgets, but also stimulating innovation and competition. The same counts from Mercosur by opening up their markets to European manufacturing, it will slowly turn away from their long tradition of protectionism. So it raises a question: who would benefit the most from this deal? Spain and Portugal, despite having large agricultural sectors have been some of the strongest advocates of the deal. They stand to win a lot as they speak the same languages, and with benefit from the liberalization of services included in the deal, it is also likely that these countries would serve as the European Union's gateway to south America. Germany would also be a significant winner on this trade deal, particularly it's auto industry, which would see tariffs drops significantly over the course of 15 years, south American farmers with increased access to the EU would also benefit greatly from the deal, but the losers would be European farmers who will face competition from south American farmers and the Mercosur manufacturers that will face additional competition from established European firms. France, Belgium and Ireland where the agricultural lobbyists particularly strong have opposed the deal, which threatens their farmers' livelihoods. But the deal's controversy has extended beyond the liberalization that it plans in the European union. It has been attacked for not respecting the criteria of the European green deal. These criticisms have been embodied by the current Brazilian president, Jair Bolsonaro. When the deal was first finalized, the Amazon was ablaze and under his watch, environmental regulation, in Brazil has weakened significantly and farmers and ranchers have accelerated the deforestation of the forest. His environmental minister has stated that the Amazon was open for economic exploitation, threatening what has often been called the earth lung. The EU's member states have lost trust in Bolosnaro's willingness to meet Brazil's climate commitments.EU farmer groups are also quick to point out the use of dangerous pesticides, as well as your genetically modified crops and hormones in Mercosur agricultural products setting it as an unfair advantage. The Mercosur farmers have since these methods are forbidden in the EU by law. In their view, this deal is another nail in the coffin for Europe's agricultural sector. These ethical concerns extend to the indigenous tribes living in the Amazon who fear the increased demand would mean even greater pressure from companies trespassing and using their territories for agriculture. Civil society and farmer unions are using these arguments as a reason to oppose the deal and less guarantees can be made for the protection of the environment, particularly as it would contradict some elements of the European green deal, the EU signature policy. But Bolsonaro's presidency is temporary with his popularity and freefall over his management of the pandemic. It is likely that some, if not, most of his changes to Brazil's environmental policy will be reversed. While the opposition is currently focused around the environmental credentials of Brazil, when Bolsonaro leaves office, it is likely that the initial opposition on protectionist grounds will re-emerge. The signing of trade deals are necessary for the EU to guarantee its global influence and to continue to having the regulatory clouds, it currently enjoys. In the past, the European union has enjoyed access to trade deals and pushed its trade partners to match it strict regulation and values, but it is something that has increasingly struggled to do with the China investment partnership, all but stalled over the treatment of the Ouighours, and forced labor camps in Xinjiang. It also highlights the difficulty that, that you can have in making economic concessions, especially when the benefits and drawbacks affect different countries. France, which is the largest recipient of common agricultural policy funds and has the most to lose is likely to continue opposing the deal using environmental or protectionist arguments. It shows the difficulty in balancing the interests of 27 countries and the trade deal raises a question about the role of the European union wants to play in a globalized world. Does it want to be one of its protagonists or focus instead on its domestic markets trade deals all across the world have been swept away due to the rising tide of protectionism. And it is still possible that that you Mercosur trade deal will soon join them. This was into Europe. Thanks for watching. If you liked this video, make sure to like comment and subscribe for the latest updates and analysis on European news.