Editorial. A new challenge for Latin American competitiveness
The trade agreement between Mercosur and the European Union (EU) represents a structural challenge for the footwear, leather, and manufacturing sectors due to the competitive asymmetries between both blocs.
The main impact lies in the progressive tariff liberalization. For the footwear and leather goods sectors, tariff reduction schedules ranging from 10 to 15 years were agreed upon, with a more favorable timeline for the Latin American bloc, which will have a shorter adjustment period than the European side. This aims to grant the regional industry time to adapt to Europe’s high level of competitiveness, particularly from countries such as Italy and Spain, benchmarks in design and high-end products.
Among the key issues are the rules of origin, which establish specific requirements for products to be considered “originating” and thus eligible for benefits, such as having, for example, 60% domestic components. Another sensitive matter is the elimination of export duties on raw hides, which will facilitate EU access to South American raw materials. While this benefits cattle producers and slaughterhouses, it creates tension with local tanneries, which fear supply shortages or increases in domestic costs.
The agreement also requires Mercosur to adapt to the EU’s strict environmental and sustainability standards.
In terms of productive asymmetry, the EU stands out for luxury goods and advanced process technologies, while Mercosur will compete based on volume and the quality of natural raw materials. In this way, the agreement pushes the regional sector toward productive specialization and forced modernization in order to avoid losing market share to high value-added European imports.
The Editor
Participate with your content in SERMA.NET and in our printed edition.
It is the opportunity to reach your customers!
Write us! marketing@serma.net