The President of the European Commission, Ursula von der Leyen, in Montevideo, December 5, 2024 (AFP / Eitan ABRAMOVICH)
The President of the European Commission Ursula von der Leyen intends on Friday in Montevideo to advance the EU-Mercosur free trade agreement alongside the presidents of Brazil, Argentina, Uruguay and Paraguay, gathered for the 65th summit of the Latin American bloc where a new stage could be sealed in the discussions started in 1999.
Under the influence of Brazil on the South American side, and Germany and Spain on the European side, the two blocs wish to finalize discussions before the arrival in January of Donald Trump at the White House and his threats of an increase in all-out customs duties.
“We have reached a common text of agreement”, with only “minimal details” missing, declared Thursday the Uruguayan Minister of Foreign Affairs, Omar Paganini, after a meeting with the new European Commissioner for Trade, Maros Sefcovic. He said he hoped that the “good news” of an agreement could be announced on Friday at the end of the meeting of heads of state.
Ms. von der Leyen, who before her arrival in Uruguay on Thursday had said on Presidents Luiz Inacio Lula da Silva, Javier Milei, Luis Lacalle Pou and Santiago Peña.
But in Paris, a diplomatic source at AFP argued that “at this stage, it is a finalization of the discussions at the level of the negotiators”, “it is neither the signature nor the conclusion of the agreement”. “So this is not the end of the story.”
The draft treaty aims to remove the majority of customs duties between the European Union and Mercosur in order to create a vast market of more than 700 million consumers. It would be “the largest trade and investment partnership ever seen. Both regions will benefit from it,” said von der Leyen.
– Blocking minority in sight –
Aerial view of Mercosur headquarters in Montevideo, November 26, 2024 (AFP / Mariana SUAREZ)
If under the European treaties, the Commission is the sole negotiator of trade agreements on behalf of the Twenty-Seven, any text signed with the Mercosur countries must still obtain ratification by winning the approval of at least 15 Member States representing 65% of the EU population, then by bringing together a majority in the European Parliament.
A blocking minority can also stop any ratification.
A fight led by France and Emmanuel Macron who in a telephone call Thursday morning “reiterated” to Ms. von der Leyen that the draft trade agreement was “unacceptable as it stands”, affirmed the Elysée. “We will continue to tirelessly defend our agricultural sovereignty,” added the French presidency on X.
Emmanuel Macron in Riyadh, Saudi Arabia, December 3, 2024 (POOL / JEANNE ACCORSINI)
After Polish Prime Minister Donald Tusk declared at the end of November that he would not accept the project “in this form”, Italy joined the refusal front on Thursday: “The conditions are not met to subscribe to the current text”, say these government sources. Rome believes that “the signing can only take place provided that adequate protections and compensation in the event of imbalances for the agricultural sector” are put in place.
And this declared trio is not alone, since Austria and the Netherlands have already expressed reluctance.
To prevent the adoption of the text, France needs to rally three other countries representing more than 35% of the EU population, a threshold easily crossed with now the support of Rome and Warsaw.
– Unfair competition? –
In Europe, supporters of the agreement emphasize the need for outlets for exporters and the need not to leave the field open to China, a rival with which trade relations have become considerably strained.
Damage in front of the Agen prefecture during the farmers' protest movement on November 19, 2024 (AFP / Thibaud MORITZ)
The agreement would allow the EU, already Mercosur's largest trading partner, to more easily export its cars, machinery and pharmaceutical products. On the other hand, it would allow the South American countries concerned to sell meat, sugar, rice, honey, soya to Europe, etc.
But many NGOs and left-wing activists believe that the creation of this vast free trade zone would accelerate deforestation in the Amazon and worsen the climate crisis by increasing greenhouse gas emissions. Greenpeace denounces a “disastrous” text for the environment, sacrificed to favor “corporate profits”.
French farmers fearing unfair competition from South American products, particularly Brazilian ones, are increasing their demonstrations.
