The European Union could be close to finalizing a trade deal with Mercosur, which brings together several South American countries. France opposes this treaty as it stands, but could see its hand forced.
Monday, November 18, the G20 summit begins in Brazil. It could be the place for the finalization of a new agreement between the European Union and Mercosur, which brings together Brazil, Argentina, Uruguay, Paraguay and Bolivia. The latter has been under discussion for around twenty years, but his signature now seems imminent. “We have two key dates: the G20 summit in November in Rio de Janeiro, and the Mercosur summit in December of this year. We will therefore work to realize this major project,” underlined the head of the Spanish government Pedro Sanchez at the economic forum in Faro, Portugal, at the end of October.
This treaty provides in particular for the elimination of the majority of customs duties between the EU and Mercosur, as well as an import quota for Latin American beef of around 90,000 to 100,000 tonnes per year. The desire to put in place such an agreement is favored by the current context of trade tensions with China and by the fear of protectionism promised by Donald Trump.
However, in France, this possible agreement is not well received. It is also one of the reasons why farmers want to mobilize next week. Farmers particularly fear unfair competition, given the difference in standards between Mercosur countries and those of the European Union. Same story on the political side, France is opposed to this treaty “as is”, as Emmanuel Macron recalled at the end of October. Michel Barnier also went to Brussels on Wednesday November 13 to defend the position of the French government.
More than 600 parliamentarians also signed a forum to oppose the treaty, recalling that France will only approve this text if it guarantees “not to increase imported deforestation in the European Union”, if the agreement is ” in compliance with the Paris climate agreement” and if it establishes “mirror measures in health and environmental matters”. The Minister of Agriculture, Annie Genevard, for her part, assured that France wants to make its voice heard: “All the work consists of rallying as many countries as possible to our cause, so as to be able to impose a veto on this agreement”, she declared on Tuesday November 12 during the question session to the government in the National Assembly.
A difficult fight for France, alone against everyone?
Despite France's opposition, it appears complicated to prevent or modify the treaty as it stands. The ratification of this trade treaty will first be decided by a majority in the European Council. If Poland and Austria are also against this agreement, at least four states representing more than 35% of the EU population would be needed to constitute a blocking minority. However, heavyweights, such as Germany and Spain, which already represent nearly 30% of the EU population, support the signing of the treaty. The EU executive also sees many advantages in this agreement: Trade Commissioner and chief European negotiator, Valdis Dombrovskis, assured that it would lead to an increase of “15 billion euros” in gross domestic product (GDP ) of the EU.
Ultimately, it is countries like Ireland, the Netherlands or Italy that could tip the balance to one side or the other. If the European Council validates the text, it will then be submitted to the European Parliament, which will have to vote on it by a majority for it to be put in place. But it will still require ratification by national parliaments. On this scale, France would have the opportunity to make itself heard, but it is likely that the European Commission will separate the commercial aspect from the political aspect of the agreement. Thus, the commercial part would escape this unanimous ratification and a majority vote would become sufficient.
