EU-Mercosur Trade Pact
- Massive trade agreement integrating a market of ~450 million people (~700 million consumers total)
- EU eliminates tariffs on South American agricultural goods (beef, poultry, ethanol)
- Mercosur drops tariffs on EU cars, machinery, and pharmaceuticals
- Goes far beyond traditional tariffs — binds developing nations to strict EU standards on sanitary rules, intellectual property, and environmental compliance
- India impact: Threatens export competitiveness; Indian goods face stiffer tariff-free competition from these two massive blocs
Emissions Trading System (ETS)
- Market-based climate policy: regulators set cap on total emissions, distribute tradable “allowances” (1 tonne CO₂ per allowance), lower cap over time
- Political pushback: Slovakia’s PM demanded its suspension — skyrocketing carbon prices placing unbearable financial burden on domestic manufacturing
UPSC Angle
- GS2: International relations, trade agreements
- GS3: Economy, environment, climate policy
📌 Facts Corner — Knowledgepedia
EU-Mercosur Pact:
- Market size: ~450 million people
- EU concession: tariff elimination on beef, poultry, ethanol
- Mercosur concession: tariff elimination on cars, machinery, pharma
- Threat to India: tariff-free competition from two mega-blocs
ETS:
- Mechanism: cap-and-trade (1 allowance = 1 tonne CO₂)
- Challenge: Slovakia demanded suspension due to cost burden