EU and Mercosur Agrees on Free Trade Deal
MONTEVIDEO: The EU and South America’s Mercosur bloc has dragged a long-delayed free trade deal over the line, announcing an agreement – at least in principle – on the pact that has deeply divided nations in Europe.
A Political Necessity
European Commission President Ursula von der Leyen and her Mercosur counterparts heralded the deal after 25 years of talks, citing the need for free trade in the face of rising protectionism globally. "This agreement is not just an economic opportunity, it is a political necessity," von der Leyen said. "I know that strong winds are coming in the opposite direction, towards isolation and fragmentation, but this agreement is our near response."
Obstacles Ahead
The trade agreement is just the start of what could be a lengthy endgame to turn it into a reality. It needs to be legalised, translated, and then approved by member nations, and could even be blocked, with France the fiercest opponent. A short press conference in Montevideo underscored some of the challenges, with only von der Leyen and Uruguayan President Luis Lacalle Pou speaking, with no questions taken after. The presidents of Brazil, Uruguay, and Paraguay sat in silence.
EU Farmers in Opposition
France, the most vociferous critic of the deal in the EU, has branded it as "unacceptable". Underscoring the obstacles it now faces, French trade minister Sophie Primas pledged to resist its next stages, citing environmental and farming concerns. European farmers have repeatedly protested against an EU-Mercosur deal that they say would lead to cheap imports of South American commodities, notably beef, that do not meet the EU’s green and food safety standards.
Support from Some EU Members
Conversely, a group of EU members, including Germany and Spain, say the deal is vital for the bloc as it looks to diversify its trade after the near-closure of the Russian market and discomfort about reliance on China. They see Mercosur as a market for EU cars, machinery, and chemicals and a potentially reliable source of critical minerals, such as battery metal lithium, required for Europe’s green transition. They also point to agricultural benefits, given the deal offers greater access and lower tariffs for EU cheeses, ham, and wine.
Conclusion
The trade agreement would require approval from 15 of the 27 EU members representing 65% of the EU population along with a simple majority in the European Parliament. South American negotiators remain optimistic that the EU will eventually give its approval and that France will not be able to rally a blocking minority.
FAQs
- What is the EU-Mercosur free trade deal?
- The EU and Mercosur have agreed on a free trade deal after 25 years of talks.
- What are the benefits of the deal?
- The deal offers greater access and lower tariffs for EU cars, machinery, and chemicals, as well as greater access to critical minerals, such as battery metal lithium, required for Europe’s green transition.
- What are the challenges facing the deal?
- The deal faces opposition from some EU member states, including France, as well as concerns from European farmers and environmental groups.
- What is the next step for the deal?
- The deal needs to be legalised, translated, and then approved by member nations, and could even be blocked by France or other EU member states.