The deal with Mercosur has been 25 years in the making and aims to create one of the world’s largest free trade zones, but many European farmers and ranchers vehemently oppose it, claiming unfair competition for their inability to compete. South American livestock producers.
After more than 20 years of negotiations, European Union and Mercosur with 27 countriesThe South American trade bloc of Brazil, Argentina, Paraguay, Uruguay and Bolivia is still trying to finalize a key trade deal that has drawn protests from European farmers. A draft agreement was announced in 2019, but disputes over environmental issueseconomic and political They are delaying final approval.
Here we take a look at the agreement to find out why it matters and the challenges it faces.
What does the agreement consist of?
Its purpose is to create one of the world’s largest free trade zonesIt will cover more than 700 million people and will cover almost 25% of world GDP. such as the free trade agreement between the USA, Mexico and Canada, reduce tariffs and trade barriersIt makes it easier for companies on both sides to export.
For the EU, the agreement will mean reducing customs duties on products such as cars, machinery and chemicals. Mercosur countries will benefit from better access to EU markets agricultural export such as beef, poultry and sugar.
Negotiations began in 1999 An initial agreement was reached in 2019, but could not be ratified due to significant opposition, especially from France.
Why do some farmers oppose the agreement?
European farmers, especially those in France, fear this influx. South American products saturate markets and harms local agriculture.
A year after the mass protest movement of European farmers, a new round of protests broke out across the continent; many people claimed that reducing tariffs or duty-free quotas on South American products could be fatal for them.
For example, 99,000 tons of beef will only face a 7.5% discounted tariff, 180,000 tons of poultry They would enter tax-free. According to the European Commission, this represents less than 2% of the EU’s annual beef consumption.
Mercosur countries have lower labor costs and less stringent regulations
Livestock farmers argue they cannot compete with South American producers who benefit from this. lower labor costs, larger farms and less stringent regulations In applications such as the use of growth hormones according to EU standards.
A European Commission audit in October found that Brazil, the world’s largest beef exporter, cannot guarantee that exports to the EU do not contain growth hormone “estradiol 17-β” has been banned in Europe for decades.
Who supports the agreement?
Germany, Spain, Italy and Portugal are some of the EU countries that put pressure on this issue. The deal will be completed by the end of the year. Germany, in particular, sees Mercosur as a key market for automakers.
In South America, leaders such as the president of Brazil, Luiz Inácio Lula da Silva They see the agreement as a boost for regional trade and economic growth. Countries such as Uruguay and Paraguay also support the agreement, hoping to diversify their trading partners and reduce their dependence on China. president of argentina, Javier Milei also supported thisThis represents a change from the skepticism of his predecessor. Industries in both regions support the agreement. European manufacturers automobile and pharmaceutical companies They see this as a way to access growing Mercosur markets.
Ursula von der LeyenThe president of the European Commission also expressed his strong support and said:agreement of great economic and strategic importance“, despite opposition from some EU Member States.
So who is against it?
France, which has the largest agricultural sector in Europe, leads the opposition within the EU, along with Poland, Austria and the Netherlands. French President Emmanuel Macron called for stricter environmental and labor standards, saying: “France will not sign the agreement in its current form“
France demands ‘mirror provisions’ from European Commission
France also asked the European Commission to renegotiate the text. containing ‘mirror sentences’This would apply the same standards to products traded between the two blocs.
ADVERTBut France’s ability to block the agreement is limited. Trade negotiations are up to the European CommissionNegotiating on behalf of 27 Member States.
Environmental groups including Greenpeace also criticized the deal, warning that it could accelerate deforestation in the Amazon and increase the use of harmful pesticides.
Mercosur summit in Uruguay will be an important moment
Mercosur summit in Uruguay on 5 and 6 December It could be a key moment for the deal. However, even if the contract is signed, Must be ratified by all 27 member states Involvement of the EU, the European Parliament and the national parliaments of all Member States before entry into force. This would give France the ability to veto it.
To speed up and facilitate ratification, the European Commission is exploring the possibility of splitting the agreement into parts. broader cooperation agreement and a trade-focused agreement. The latter would require only a majority vote under EU rules, with no need for unanimous approval. With this plan, France will lose its veto right unless it garners enough support to form a blocking minority. Although countries such as Poland and Austria have raised objections, their combined impact does not meet the threshold needed to stop the deal.
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