In many cases, these trade agreements are pursued as part of the government`s policy of expanding markets for biofuels (ethanol). The EU encourages Brazil to reduce tariff and non-tariff barriers and promote a stable and more open regulatory environment for European investors and traders. A future Association Agreement BETWEEN the EU and Mercosur should promote trade integration between Mercosur countries and create new opportunities for trade and investment with the EU, eliminating tariff and non-tariff barriers and foreign direct investment. The United States engages with Brazil on trade and investment issues through a series of initiatives. The project will then focus on a study on fair and equitable trade in Brazil and will hold a second forum in December 2018. Brazil is one of the countries that, according to the European Commission`s latest report, has resorted to a high number of potentially restrictive measures. In 2011, the United States and Brazil signed the Trade and Economic Cooperation Agreement to enhance trade and investment cooperation between the two major economies of the Western Hemisphere. The agreement expands our direct trade and investment relations by providing a framework for deepening cooperation on a number of issues of mutual interest, including innovation, trade facilitation and technical barriers to trade. Brazil is negotiating a free trade agreement with the EU within the framework of the Mercosur Group. Mercosur is formally a customs union. While a free trade agreement involves a commitment between countries to lower tariffs and other trade rules granting preferential market access, a customs union adds a common external right for imports into the bloc and a commitment by its four members to negotiate trade agreements with third countries. In theory, this means that each country has preferential access to the markets of other members and increased bargaining power in trade agreements, much like for the members of the European Union.
In practice, trade within the bloc is entangled in bureaucracy, non-tariff barriers and agreements restricting private trade. Very few external negotiations have been concluded, so Mercosur is the most closed region in the world, with an average tariff of more than 12%. The only comprehensive free trade agreements signed by Mercosur since its inception in 1994 were with Egypt and Israel, and all Mercosur trade agreements cover less than 10% (calculations based on the World Bank`s Global Development Indicators) of global GDP. . . .