The European Union and Mercosur countries are pushing to conclude their long-running trade negotiations by the end of the year.
Mercosur is a trade bloc of South American countries.
However, despite 25 years of talks, the deal still lacks unanimous support from European member states due to concerns about the future of the agriculture sector clash with the bloc’s strategic requirements.
Here’s a look at the deal and its concerns.
The EU-Mercosur trade deal
The trade deal seeks to establish one of the world’s largest free trade zones, with 750 million people or roughly one-fifth of the world’s population.
It aims to lower trade barriers and tariffs to facilitate export by companies on both sides, much like the US-Mexico-Canada free trade agreement.
For the EU, the deal would mean lower tariffs on products like cars, machinery, and chemicals, while for Mercosur countries, it would provide improved access to EU markets for agricultural goods including sugar, beef, and poultry.
An initial agreement was achieved in 2019 after negotiations started in 1999; however, it has not been approved because of strong opposition, especially from France.
Countries supporting the deal
Germany, Spain, and Portugal are among the EU countries that are in favour of the deal and are pushing for it to be finalised by year’s end.
Germany, in particular, sees Mercosur as a key market for its automakers.
Leaders in South America, like
Brazil’s President Luiz Inacio Lula da Silva, see the deal as a boon to regional commerce and economic expansion.
The agreement is also supported by nations like Uruguay and Paraguay, who want to lessen their dependency on China and diversify their trading relationships.
Argentina’s President Javier Milei has also supported it, indicating a change from his predecessor’s doubts.
The deal is also backed by industries in both regions.
European carmakers and pharmaceutical companies see it as a way to access Mercosur’s growing markets.
European Commission President Ursula von der Leyen has also expressed strong support, calling it “an agreement of great economic and strategic importance.”
Her support comes despite opposition from certain EU member states.
EU countries against the deal
France is the biggest agriculture producer in Europe. The country, along with Poland, Austria and the Netherlands, has remained steadfast against the deal.
Recently, Italy has also voiced concerns about the possibility of a Mercosur agreement. The current version of the deal is “unacceptable,” according to Italian Agriculture Minister Francesco Lollobrigida, who last week called for Mercosur farmers to be held to the same “obligations” as their EU counterparts.
The agreement has also drawn criticism from environmental organisations like Greenpeace, which fear that it may hasten Amazonian deforestation and increase the use of dangerous pesticides.
Gendarmerie officers stand guard next to a demonstrator during a protest against the EU-Mercosur Trade Agreement, in Strasbourg, France November 26, 2024. Reuters
Concerned that the competition will cut prices in its primary European markets in half, Ireland, the world’s fifth-largest beef exporter, has also voiced doubts about the agreement.
Belgian farmers have also protested against the trade deal.
It is unclear, though, if these nations will follow France and try to block the deal.
Their concerns
French President Emmanuel Macron has called for stronger environmental and labour standards, stating that his country “would not sign the deal as is.”
The country has also requested that the European Commission renegotiate the text, particularly by incorporating “mirror clauses,” which would impose identical standards on products traded between the two blocs.
European farmers, especially in France, worry that an influx of South American products would saturate their markets, undercutting local agriculture. One year after a massive European farmers’ protest movement, another round of protests have erupted across the continent, with many claiming that reduced tariffs or duty-free quotas for South American products could be fatal for them.
For example, 99,000 tonnes of beef would face a reduced tariff of just 7.5 per cent, while 180,000 tonnes of poultry would enter duty-free. According to the European Commission, this accounts for less than two per cent of the EU’s annual beef consumption.
Livestock farmers argue they cannot compete with South American producers, who benefit from lower labour costs, larger farms and less stringent regulations on practices such as the use of growth hormones compared to EU standards.
Brazil, the largest beef exporter in the world, is unable to ensure that its shipments to the EU are free of the growth hormone “oestradiol 17-β,” which has been prohibited in Europe for decades, according to an audit conducted by the European Commission in October.
Moreover, it is pertinent to note that France has no power to stop the agreement because the European Commission, which negotiates on behalf of the 27 member states, controls trade negotiations.
Future course
The Mercosur summit on December 5 and 6 in Uruguay could be a key moment for the deal.
However, even if it is signed, it must be ratified by all member states, the European Parliament and all member states’ national parliaments before taking effect.
This would give France a chance to veto it.
The European Commission is thinking of dividing the pact into a trade-focused accord and a broader cooperation agreement to speed up and facilitate approval.
Under EU regulations, the latter would simply need a majority vote, obviating the need for unanimous consent.
France would no longer have the veto power under this approach unless it could gather enough support to create a blocking minority.
Although nations like Poland and Austria have voiced their disapproval, their combined influence is insufficient to stop the pact.
With inputs from The Associated Press
Author :
Publish date : 2024-11-26 20:43:00
Copyright for syndicated content belongs to the linked Source.
—-
Author : theamericannews
Publish date : 2024-11-27 10:02:19
Copyright for syndicated content belongs to the linked Source.