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Vouga Abogados 

July, 2019 - Paraguay



MERCOSUR and European Union Signed Strategic Trade Agreement after Long Negotiations


After 20 years of negotiations, the MERCOSUR and the European Union has signed a Strategic Association Agreement.

Through this Agreement, Paraguay, as a member of MERCOSUR, will have direct access to the market of all members of the EU, in addition to enjoying economic advantages that include the elimination of tariffs on 100% of industrial goods in a 10-year transition period, a reduction of 93% on tariffs for agricultural products, the commitment not to increase those tariffs over a cap rate for all products, and the opening for the MERCOSUR of the market for maritime services.

The Agreement also includes the following matters:

(a) The mutual interest in boosting e-commerce through the elimination of barriers, offering greater legal security to companies that offer e-commerce services by providing rules banning the application of customs taxes on electronic transmissions and rules guarantying the validity and legal effects of transactions.

(b) The reciprocal opening of the market for public procurement of goods and services, by applying principles of non-discrimination, transparency and fairness, in addition to other rules detailed in the Public Procurement Agreement of the World Trade Organization (WTO).

(c) The creation of a clear and strict set of rules on competition matters to be applied in the absence of WTO regulations and setting forth that the authorities in competition law must treat companies of both parties equally in terms of procedural fairness and defense rights.

(d) Intellectual property rights are also an important part of the Agreement. For patent designs, their protection is granted for at least 15 years. As to denominations of origin, the MERCOSUR shall protect them at level similar to that of the EU, banning the use by non-authentic products of the denominations of origin along with the terms “imitation”, “type”, “stile” or “class”.

(e) As regards the dispute resolution mechanism, mediation and arbitration are set forth as alternatives to settle disputes.

If approved by all member of the both parties, the Agreement will undoubtedly bring challenges and opportunities for Paraguay and the region.


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