Recently, after 20 years of negotiations, Mercosur was able to sign a Strategic Association Agreement with the European Union.

Through this agreement, Paraguay, as a member of Mercosur, will have direct access to the market of 28 EU member countries, in addition to enjoying economic advantages that include, among others, the liberalization of tariffs on 100% of industrial goods over a 10-year transition period, the reduction of 93% of export tariffs on agricultural products, the commitment not to increase tariffs above a prime rate for all products, including those that are not subject to preferential treatment and, in particular, the opening of the maritime services market to Mercosur.

The agreement contemplates, among other issues:

(a) The interest in promoting electronic commerce through the elimination of barriers, offering more legal certainty to companies offering e-commerce services, providing rules that prohibit the imposition of customs duties on electronic transmissions and rules that guarantee the validity and legal effect of transactions.

(b) The reciprocal opening of the public bidding market in both blocks in the areas of goods and services, applying principles of non-discrimination, transparency and equity, in addition to other rules detailed in the World Trade Organization (WTO) Agreement on Government Procurement.

(c) The demarcation of clear and transparent competition rules, through the creation of a strict set of rules to be applied in the absence of WTO regulations that stipulates, among other things, that competition authorities must treat companies on both sides equally in terms of procedural fairness and rights of defense.

(d) Intellectual rights are also an important part of the agreement. Regarding industrial designs, the protection of such designs is established for at least 15 years. As regards products with geographical indications, these will be protected in Mercosur at a level comparable to that of the European Union, prohibiting the use by non-authentic products of the geographical indication expressions 'type', 'class', 'style' or 'imitation'.

(e) With regard to the conflict resolution mechanism, mediation and arbitration, among others, are established as alternatives to settle disputes.

If approved by the member countries of both blocs, the agreement will undoubtedly bring challenges and opportunities for Paraguay and the region.