EU Divided on Mercosur Trade Agreement as Negotiations Approach Conclusion

The European Union and the Mercosur nations are gearing up for a decisive move to ratify the EU-Mercosur Association Agreement, a contentious free trade pact that has been in negotiation for 25 years.

Under pressure from member states like Germany and Spain, the European Commission appears ready to finalize the agreement. This deal would enable Latin American countries, particularly, to increase their exports of beef, chicken, and sugar to Europe without incurring customs duties.

However, opposition among several EU nations, particularly France, has stalled progress. France is actively seeking to rally support from other EU members to form a blocking minority against the agreement.

The EU-Mercosur deal involves Brazil, Argentina, Paraguay, and Uruguay, aiming to establish one of the largest free trade zones globally, encompassing over 700 million people. Its primary goal is to reduce tariffs and enhance trade. Bolivia, a new Mercosur member, and Venezuela, currently suspended since 2016, are not part of this agreement.

Initially proposed in 1999 and agreed upon in 2019, the pact has faced persistent rejections from European farmers, who express concerns about unfair competition and the dumping of South American products. Additionally, they argue that the agreement lacks sufficient environmental, social, and health regulations.

Currently, the EU is a significant market for Mercosur nations. According to Mercosur data, in 2023, Brazil, Argentina, Uruguay, and Paraguay exported nearly $24 billion (approximately €22.7 billion) in agricultural products to the EU, representing 13.3% of their total exports outside Mercosur.

Eurostat reports EU agricultural imports from these countries at €18.4 billion in 2023 (excluding tobacco and salt), making up 12.6% of total imports by the 27 EU member states.

France's Farmers Lead the Opposition

French farmers have long been vocal about their declining incomes and stringent EU environmental regulations. Earlier this year, protests, including motorway blockades, prompted government assurances of substantial support for the farming sector.

Farmers fear that the agreement would result in unfair competition from Argentine and Brazilian meat, which would bypass strict EU health and environmental standards.

In a recent wave of protests, starting on November 17, farmers led by the agricultural union FNSEA demonstrated against the deal. FNSEA leader Arnaud Rousseau criticized the pact for not aligning with the Paris Climate Agreement and failing to ensure equal production standards.

On November 19, farmers, supported by the Coordination Rurale union, established a blockade on the A9 motorway near the Spanish border, disrupting truck traffic while allowing cars through. The A9 is a vital trade route between the Iberian Peninsula and the rest of Europe.

The French political landscape has shown unusual unity in opposing the EU-Mercosur agreement, with President Emmanuel Macron publicly rejecting the deal during his South America tour amidst the protests.

On November 20, Coordination Rurale lifted the blockade after Prime Minister Michel Barnier expressed support, highlighting the government’s commitment to farmers.

Macron Asserts France's Collective Stance

During a G20 summit in Brazil, Macron emphasized that France’s stance against the agreement is not isolated, noting that several other countries share similar concerns.

On November 26, Polish Prime Minister Donald Tusk’s government adopted a resolution opposing the current draft of the Mercosur agreement. Tusk stated that Poland would not endorse the deal in its present form, echoing French opposition.

Earlier this month, Poland’s agriculture ministry raised significant concerns about the agreement, warning that it could jeopardize the local poultry, beef, sugar, and ethanol industries.

In Romania, the Alliance for Agriculture and Cooperation has urged authorities to block the trade agreement, arguing it would negatively impact local agriculture and farmer compliance with EU standards.

Within the Italian government, opinions on the agreement are mixed. Agriculture Minister Francesco Lollobrigida, allied with far-right Prime Minister Giorgia Meloni, deemed the current form of the EU-Mercosur treaty unacceptable, stressing the need for Mercosur nations to adhere to the same standards as EU farmers. Conversely, Foreign Minister Antonio Tajani expressed support for the deal, while acknowledging certain unresolved issues.

Support for the Deal Highlights Economic Benefits

Despite substantial opposition, some EU nations are advocating for the advancement of the agreement with Mercosur. During a recent EU trade ministers meeting in Brussels, Spanish Secretary of State for Trade María Amparo López Senovilla expressed optimism for a final technical negotiation round that could lead to significant progress by December.

German Chancellor Olaf Scholz has called for the deal to be finalized after years of negotiation, stating it is time to conclude the Mercosur free trade agreement.

Portuguese Agriculture Minister José Manuel Fernandes highlighted the potential for the agreement to help cut Portugal’s trade deficit with Brazil, asserting it could mitigate a €500 million deficit in the agri-food and forestry sectors.

Bulgaria’s Deputy Minister of Economy and Industry, Nikolay Pavlov, emphasized the importance of finalizing negotiations with