French farmers vow to resume mobilization on Monday, in particular to protest against the prospect of an EU-Mercosur free trade deal. However, after a political agreement reached in 2019 and almost 25 years of negotiations, most European Union states are pushing to conclude the final negotiations, if possible before Donald Trump takes office on 20 January.
German cars on one side, Argentine beef and Brazilian chicken on the other: the EU free trade agreementMercosurnegotiated for almost a quarter of a century, must eliminate or reduce customs duties on numerous services, agricultural products and even industrial products between member countries of theEuropean Union and those of Mercosur (Brazil, Argentine, Uruguay, Paraguay, Bolivia). In 2019, a political agreement was reached to create one of the largest free trade zones in the world. However, the text has not yet been officially adopted, mainly due to opposition from France. Faced with the prospect of the coming to power of Donald Trump – will officially take office on January 20th – the European Commission, pushed mainly by Germany and Spain, is trying to conclude the negotiations.
Faced with Trump’s protectionism, diversify exports
The American billionaire promised during his election campaign customs duties of 10 to 20% on imports into the United States and as much as 60% on Chinese products, which could trigger trade retaliation. Faced with the prospect of renewed protectionism between the world’s two largest economies, ” there is impatience among member states [de l’Union européenne] who support this agreement. We will undoubtedly be faced with a trade war that will disrupt international trade. Through this trade agreement, the goal is to forge a closer alliance with Latin American countries and bring together strategic interests », Explains Elvire Fabry, senior researcher in commercial geopolitics at the Jacques Delors Institute. “ The place we don’t take by not signing the agreement is the Chinese who takes it », estimates the researcher think tank European.
China has become South America’s largest trading partner, surpassing the United States. For the Mercosur countries, the interest is also to diversify their exports, as well as access a market of 450 million European consumers. A new round of negotiations between the European Commission and Mercosur is scheduled for the end of November.
Latest environmental negotiations
The discussions renewed in recent weeks do not concern the political agreement already concluded in 2019, but an annex to the text. The EU calls for greater environmental commitments from Mercosur countries. The European Commission wishes to include as “ essential clause » compliance with the 2015 Paris Agreement, the objective of which is to limit global warming to 1.5 degrees compared to the pre-industrial era. For their part, Mercosur countries negotiate public procurement rules to protect their national industries. Brazil, for example, wants guarantees for its car industry, which faces competition from German car exports.
Strong opposition to the treaty in France
Despite the desire of Germany, Spain and the European Commission to proceed quickly, the agreement remains very unpopular in France. THE farmers intend to resume their mobilisations from Monday, which will coincide with the start of the G20 in Brazil, where there are fears that an EU-Mercosur agreement could be concluded on the sidelines of the summit. Furthermore, more than 620 French parliamentarians from all political parties signed a letter addressed to the European Commission on Tuesday 12 November to demonstrate their opposition to the treaty.
Read alsoEU/Mercosur agreement: over 200 French deputies ask Paris to veto
However, Brussels stresses that France would benefit from the agreement for its exports of wine and dairy products. Furthermore, the shares of meat imported from Mercosur with reduced customs duties are low compared to European production, the Commission estimates: these shares are equivalent to 1.6% of European beef production and 1.4% for poultry. Averages which could translate into higher percentages in some countries. France, supported by Ireland and the Netherlands, seeks to unite Poland and other European countries to its cause. But ” for the moment we are still below the mobilization threshold sufficient to block ratification » at European level if the text were adopted by a qualified majority, underlines Elvire Fabry.
Interview Between the Time.news Editor and Elvire Fabry, Senior Researcher in Commercial Geopolitics at the Jacques Delors Institute
Editor: Welcome, Elvire! Thank you for joining us today to discuss the ongoing negotiations surrounding the EU-Mercosur free trade agreement, especially in light of the recent announcements from French farmers about their mobilization. Could you start by giving us a brief overview of what this agreement entails and why it’s significant?
Elvire Fabry: Thank you for having me! The EU-Mercosur agreement, after nearly 25 years of negotiations, aims to create one of the world’s largest free trade zones, connecting the European Union with Mercosur countries—Brazil, Argentina, Uruguay, Paraguay, and Bolivia. This agreement is significant because it seeks to eliminate or reduce customs duties on a wide range of goods and services, which would foster trade by allowing European companies to access a market of 450 million consumers in Latin America and vice versa.
Editor: It’s clear that this agreement has considerable economic implications. However, we’re seeing strong opposition from France, particularly from farmers. Can you elaborate on their concerns and the broader political context?
Elvire Fabry: Absolutely. French farmers are deeply concerned about increased competition from agricultural products flowing in from Mercosur countries, particularly beef and chicken. They fear that lowering trade barriers could undermine their livelihoods and agricultural standards. This is a part of a broader tension within the EU, as member states grapple with the balance between protecting local industries and fostering international trade. The urgency behind concluding these negotiations has intensified due to the impending inauguration of Donald Trump, which many believe could usher in a wave of protectionism that may disrupt current trade dynamics.
Editor: Speaking of Donald Trump, how do you see his incoming administration influencing the EU’s approach to international trade negotiations?
Elvire Fabry: The prospect of Trump’s protectionism really heightens the stakes. His promises to impose significant tariffs on imports could lead to retaliatory measures, igniting trade wars. This situation has led to impatience among EU member states that support the Mercosur agreement. They view it as a strategic move to strengthen ties with Latin American countries and counterbalance the growing influence of China in the region. Failure to act could allow China to fill the trade vacuum left by the EU, which would be detrimental from a geopolitical standpoint.
Editor: It seems like there’s a race against time here. What can you tell us about the latest negotiations and the environmental considerations involved?
Elvire Fabry: Indeed, time is of the essence. The discussions underway now are concerning an annex to the 2019 political agreement, with a primary focus on enhancing environmental commitments from Mercosur countries. The EU insists on including compliance with the Paris Agreement as an essential clause. This is fundamental, as the EU aims to ensure that trade doesn’t come at the expense of environmental standards. However, Mercosur countries also have their own interests and are negotiating stipulations, such as public procurement rules, to protect their domestic industries, especially in sectors like automotive, as seen with Brazil’s concerns about competition from German cars.
Editor: This is such a complex issue with various layers of economic and environmental concerns. If the agreement is finalized, how do you anticipate it will reshape trade relations between Europe and Latin America?
Elvire Fabry: If successfully concluded, the EU-Mercosur agreement could significantly reshape trade relations, creating a framework that encourages not only increased trade volumes but also a deeper strategic partnership. It could enhance diversification of exports for Mercosur countries while allowing European nations to secure a foothold in South America amidst growing competition from China. Ultimately, it could lay the groundwork for a more integrated global economy that prioritizes sustainable development.
Editor: Thank you for sharing your insights, Elvire. This is certainly a critical period for international trade, and the outcome of these negotiations will have lasting implications. We appreciate your expertise!
Elvire Fabry: Thank you for the opportunity! It’s important to keep these dialogues going as the situation evolves.