France has fiercely opposed the free trade agreement between the EU and five South American countries. But does Paris have a right of veto for a treaty signed by the European Union?
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After decades of negotiations, the Mercosur treaty continues to spark controversy.
In recent weeks, hundreds offarmers demonstrated in France and in other European countries against the free trade agreement between the EU and the South American bloc made up of Brazil, Argentina, Paraguay, Uruguay and Bolivia (also known as name of Mercosur).
Euronews sought to understand why the Mercosur treaty is so controversial and whether countries that oppose it, such as France, can block the agreement.
What is the Mercosur treaty?
It is a free trade agreement that aims to eliminate almost all taxes on products traded between the two signing blocs.
The agreement aims to establish one of the world's largest free trade zones, encompassing 750 million people and around a fifth of the global economy.
By signing this agreement, Europe will be able to export much more easily cars, machines, pesticides, pharmaceuticals, wine and cheese.
On the other hand, Europe will be able to import spare parts and food products at a much lower price from South American countries.
Why are farmers protesting against this treaty?
Many farmers believe the treaty could devastate the European agricultural sector and lead to unfair competition.
“We have regulations to produce food in quantity and quality. Today, other countries, particularly those in South America, do not have the same regulations. This is what we are denouncing,” said Stéphane Joandel, a French dairy producer and general secretary of an agricultural union.
“We cannot ask farmers to produce in compliance with all standards and then import products that do not respect animal welfare, environmental rules or even labor laws,” he told Euronews.
European farmers are calling for “mirror clauses” that would force their competitors to respect the same rules and regulations.
Although the European Commission assures that Mercosur countries will have to comply with rules and regulations, a recent report claims that Brazil does not have sufficient guarantees to ensure that meat containing hormones banned in the EU will not reach not the continent.
Who are the winners and losers of the agreement?
According to Charlotte Emlinger, an economist specializing in trade and agriculture, the winners are the manufacturing industry in sectors such as automobiles, pharmaceuticals, machinery, textiles and others, as well as French wine and cheese producers.
The losers are the beef and poultry sectorsexplained Ms. Emlinger. However, she believes that the impact of Mercosur will be very limited.
“What has been negotiated is a reduction in customs duties on a certain volume of products, such as a relatively small volume of beef. This is 99,000 tonnes of beef. This is only 1.2 % of European beef consumption. These volumes will have a limited impact on the European market“, she told Euronews.
ADVERTISEMENT“The anger of farmers is understandable, even legitimate. This is an economically very fragile sector, which has recently had to face diseases and bad weather. I think that Mercosur is the straw that is the last straw rather than the heart of the problem,” she said.
Which countries are in favor of the Mercosur trade agreement?
Several major EU economies are in favor of the treaty, such as Germany, Portugal and Spain.
“Does the European Union wish to isolate itself? Or is it interested, in the particular geopolitical context that we are experiencing, and especially after the American election, in the expansion of the network of trade agreements with countries third parties in order to maintain our economic and commercial influence? I think the answer is very clear,” said Luis Planas Puchades, Spanish Minister of Agriculture.
Ursula von der Leyen, president of the European Commission, also voiced her support, calling the agreement “very important from an economic and strategic point of view.”
ADVERTISEMENTWhich countries oppose the trade deal and can they block it?
France fiercely opposed the Mercosur treatyas well as Poland, Austria and the Netherlands.
Last Wednesday, the lower house of the French parliament voted almost unanimously against the deal – a rare show of unity in a politically divided country. But this vote was only symbolic.
To block the trade agreement, France would have to rally at least three EU countries representing at least 35% of the Union's population.
Currently, Poland is the only country with a large population that has sided with France. Paris must still find two other large countries to form a blocking minority.
ADVERTISEMENTFrance has courted populous countries, such as Italy and Romania, in order to reach the threshold needed to block the deal.
What's next?
The Mercosur summit, which will be held on December 5 and 6 in Uruguay, could be a key moment for the signing of the agreement.
If the EU and the South American bloc manage to finalize the treaty by then, it will take several more months, even several yearsfor the new rules to come into force.
