If the most is done, the worst (perhaps) is yet to come. The treaty must in fact be examined by the European Council and the European Parliament. The 27 have different positions but the Commission could be able to force its hand by deciding on a legal basis that provides for a positive outcome of the vote with only a qualified majority. For the entry into force we will certainly talk about it again not before the second half of 2025.
The front of the countries against it is broad. Captained by France, it also sees aligned Poland, Belgium, Austria and Ireland. The latest positions expressed by the Italian government of Giorgia Meloni on the occasion of the G20 in Brazil they seemed to align themselves with their cousins from beyond the Alps.
What is the point of an agreement that began to be negotiated in the last century?
Negotiations began at the end of the last millennium, the world was different from today. Suffice it to say that in 2001 China entered the World Trade Organization with the blessing of Bill Clinton, then US president, who imagined that Beijing's democratization process would begin here. Things, as we know, went differently. The point is not China, or rather, it is also China, but how current is an agreement whose purely commercial terms have been negotiated over such a long period of time, even if partially revised in the latest rounds of negotiations.
According to the words of Ursula von der Leyen, everyone wins and no one loses.
The agreement is defined as historic by Brussels, creates a market of over 700 million consumers, provides overall for the elimination of duties for over 90% of imports from Mercosur into the EU and imports from the EU for American countries Latin. For the Union of 27 it will mean savings of around four billion euros.
In 2023, European exports to the four Mercosur countries reached 55.7 billion euros (in the same year exports to the United States were almost ten times greater, reaching 502 billion euros), while those of Mercosur to the EU they stood at 53.7 billion euros. The numbers are destined to grow.
The terms of the agreement in summary
Specifically, the agreement provides for the elimination of duties on 82% of Mercosur agricultural products and 93% of European products. There will be quotas for products considered sensitive, such as beef and chicken meat. Within ten years, duties on industrial products from Mercosur will be revoked, and the latter will eliminate them on 90% of European industrial products.
The car was an important negotiating point: one particular clause protects the automotive sector andelectric car EU-branded remains one of the most delicate points of the agreement. The fear of Brazil and other Latin American countries is that the raw materials essential to European industry, such as lithium and copper, could be purchased by the 27 and returned in the most varied forms. Like cars, in fact.
European cars today cross the gates of the continent faced with tariffs of 35%, to try to limit South American fears: thus, the agreement signed by von der Leyen provides for a transition period of 18 years oldagainst the 15 expected in 2019, to achieve the elimination of duties.
Brussels has also banged its fists on the table to defend its interests and values by obtaining binding commitments on compliance with the Paris Agreement and stopping deforestation by 2030.
Agriculture, the sore notes for the farm of Europe
In terms of the agricultural industry, the terms of the agreement had already been established in 2019. Terms that must be applied to France, considered “the farm of the Old Continent”. President Emmanuel Macron has repeatedly declared that “as it stands, the treaty with Mercosur is not acceptable”; and this time the French trade associations also fought with their head of state, and they continue to do so. Although the agreement requires the Mercosur countries to respect European phytosanitary standards and those of the International Labor Organisation, in France there is more than one doubt. No less concerned about the use of hormones and pesticides banned in the Union of 27 is “Copa Cogeca”, the European farmers' association.
If France is in no hurry (and it is a form of opposition), Germany and Spain are instead pressing on the accelerator. Spain it does not only look at the historical relations that bind it to the South American continent but, as Prime Minister Pedro Sánchez declared, the agreement builds an unprecedented economic bridge between Europe and Latin America.
The Germany, which is heading for early elections, It is facing one of the worst economic crises in its post-war history and is hoping for an agreement to restore gas to production and, above all, exports. According to data from the EU Commission, today German exports to Mercosur amount to 15.4 billion euros per year, with 12 thousand companies involved, which guarantee something like 244,000 jobs.
The German Economic Institute – based on figures calculated with the Global Trade Analysis Project, GTAP – believes that the overall economic effects will probably be limited: between 2024 and 2040 in the EU, GDP could grow by only 0.06%, equal to approximately 11.3 billion dollars. The biggest beneficiary could be Brazil, with a GDP growth of 0.46%, which would be equivalent to 9.3 billion dollars. But – in a phase of unprecedented difficulty – the German automotive industry is waiting for nothing else. In 2023, according to the Automobile Industry Association, only 20,700 German cars were exported to Argentina and Brazil.
In addition to the economic aspect, the agreement has a geopolitical and geostrategic one that is decidedly not negligible. It serves to embarrass the Chinese who have been undermining the region with their soft power for over ten years. The inauguration of the mega port of Chancay in Peru last November 15th is only the tip of the iceberg of the strategy of the People's Republic which knows how to look very far ahead.
Especially Europe but also the United States can no longer afford to sit with their arms folded. And not even Switzerland, which in turn has been negotiating a similar agreement with the countries of the South American bloc since 2017.
In the image: environmentalist organizations are also among those opposed to the agreement
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