EU says it will provisionally apply contested Mercosur trade deal

The European Union will implement its mammoth trade deal with the Mercosur bloc while waiting for a top court's ruling on its legality, EU chief Ursula von der Leyen said Friday.

The European Commission's move – announced after Argentina and Uruguay ratified the agreement Thursday – comes despite strong opposition from key power France.

"The commission will now proceed with provisional application," von der Leyen said in Brussels, recalling that member states had given the EU executive power to do so.

"Provisional application is, by its nature, provisional," she added, saying: "The agreement can only be fully concluded once the European Parliament has given its consent."

She hailed the ratification by the two South American countries as "good news."

Brazil and Paraguay are expected to ratify the agreement in the coming days. 

The deal still needs a green light from lawmakers in the European Parliament, which referred it to the EU's top court within days of being inked in January.

France has led opposition to the deal and unsuccessfully attempted to block it over worries for its farmers, who fear being undercut by cheaper goods from Brazil and its neighbours.

The French government last month warned any provisional application would be a "democratic violation."

Reacting to von der Leyen's announcement, French EU lawmaker Celine Imart accused the commission of "showing contempt" to farmers.

"The commission is sending a disastrous signal to our farmers, who are already struggling, and is further fuelling distrust of the European Union," she said.

"We will continue to fight with determination to ensure that this provisional application never becomes permanent," she told AFP.

Agriculture worries

The deal between the EU and the four founding members of the Mercosur bloc – Argentina, Brazil, Paraguay and Uruguay – was a quarter-century in the making.

The accord creates one of the world's biggest free-trade zones and eliminates tariffs on more than 90 percent of trade between the two blocs, which together account for 30 percent of global GDP and over 700 million consumers.

Farmers across Europe remain unconvinced and are up in arms, including in Spain where they staged a protest against the deal in Madrid earlier this month.

The European Commission, however, insists it has fully addressed their concerns by approving a series of safeguards for its producers.

Von der Leyen stressed the deal offered "countless opportunities."

She added: "It allows our small and medium sized businesses to access markets and scale they could only dream of before."

Major exports from the South American grouping to the EU include agricultural products and minerals, while the 27-country bloc would export machinery, chemicals, and pharmaceuticals with smaller levies.

Revitalisation

Mercosur's objective is "to do everything that needs to be done at the political, legislative and bureaucratic levels," said analyst Fabián Calle.

"The position of Argentina and the Mercosur countries is that there should be no excuses from the European side for postponing or not implementing the agreement due to lack of ratification" after 25 years of negotiations, the expert added.

The treaty has broad support within the South American bloc, despite reservations from some industrial sectors and others such as the wine industry. 

"For Mercosur, it is a revitalisation," said international analyst Marcelo Elizondo, noting that the economies of the South American bloc are "very closed."

The agreement "creates a structural opening that is also well institutionalised and achieved with a very compatible economy such as that of the European Union," he said. 

– TIMES/AFP