Trump’s global tariffs are persuading Austria to change its mind on a trade agreement between the European Union and the Mercosur bloc that it had long opposed.
On Saturday, the Federal Minister of Labour and Economy of Austria, Wolfgang Hattmannsdorfer, emphasized that a totally different framework should be used to assess the Mercosur agreement. He also mentioned that they urgently required this agreement.
Austria views the EU-Mercosur trade deal as a remedy to regain economic stability.
Argentina, Bolivia, Brazil, Paraguay, and Uruguay are the five full members of Mercosur, a regional economic market created in 1991. Venezuela has been denied full membership since 2016. Additionally, associate members include seven additional South and Central American nations.
Hattmannsdorfer has shown Austria’s interest in the EU-Mercosur trade agreement. To illustrate this, Hattmannsdorfer pressed the European Commission to draft a final agreement and ratification procedure for the free-trade agreement signed in December to create an integrated market of 780 million consumers in Europe and Latin America.
However, based on sources, after 20 years of negotiations, there is now one less European country opposing the agreement. Some European nations, such as France and Poland, have stated that they will not accept it because of its possible effects on farmers.
Based on the argument of 45-year-old Hattmannsdorfer, who started his job in March, stated that it made sense that there were objections to the initial agreement. He, however, highlighted that the benefits and prospects for Austria as an exporter will exceed these concerns.
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Europe and Austria’s governments have actively worked to mitigate the impact of Trump’s policies.
The EU-Mercosur trade agreement demonstrates how Trump’s attacks on the international economic system are forcing countries to quickly change their trading patterns and adopt new ones even though they did not prefer them previously.
For instance, some countries have established new trade partnerships and are looking for export markets that might no longer be accessible to the U.S.
On Monday, EU trade ministers are scheduled to meet to talk about the U.S. measures. In addition to promising an appropriate response, European Commission President Ursula von der Leyen has stated that the EU would rather avoid conflict and work out a negotiated solution in the upcoming weeks.
Moreover, in addition to reducing a budget deficit and supporting an industrial sector damaged due to the impacts of the set tariffs and high energy prices, Austria’s government is trying to lift the country out of what is expected to be a third year of recession.
It is worth noting that, in light of the far-right Freedom Party’s growing popularity, Hattmannsdorfer’s remarks are all the more noteworthy because they come from a conservative People’s Party-appointed minister who has strong ties to rural Austria and has been cautious about hurting farmers.
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Austria’s shift toward supporting the EU-Mercosur trade agreement reflects the growing pressure of global trade dynamics, exacerbated by Trump’s tariffs.
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