Growing farmer protests in Europe and opposition from France have hit prospects for a free-trade deal between the European Union and Mercosur that’s been under negotiation for nearly a quarter of a century.
Brussels insisted though on Tuesday it was still trying to get it over the line.
"The conditions required to conclude negotiations with Mercosur are not quite there yet," acknowledged European Commission spokesman Eric Mamer.
But talks are continuing with the South American trade bloc made up of Argentina, Brazil, Paraguay and Uruguay, he added.
Farmers across Europe – including in France, Poland, Germany and Belgium – have been blocking roads to demand better revenues and conditions.
While the farmers have a list of demands, many single out the Mercosur deal.
They fear it would further depress their produce prices amid increased competition from exporting nations that are not bound by strict and costly EU environmental laws.
The French government rejects the trade pact, French President Emmanuel Macron reaffirmed during a visit to Sweden on Tuesday.
"France is opposed to it because it's a deal going back several years that doesn't make Mercosur farmers and companies abide by the same rules as ours," he said.
Macron said he would and European Commission President Ursula von der Leyen would discuss the issue Thursday, on the sidelines of an EU summit.
Von der Leyen's spokesman insisted however that the trade talks were not buried yet.
"Technical" negotiations were held in Brazil last week and EU commission vice-president for trade, Valdis Dombrovskis, stood ready to go to South America "in the potential case where a Mercosur agreement would be reached," Mamer said.
"But on the basis of the last few meetings that we've had, that does not appear to be the case right now," he added.
Quarter century of talks
"The EU is continuing its objective of trying to reach an agreement which complies with our objectives when it comes to sustainability and which also takes into account our concerns when it comes to the agricultural sector," Mamer said.
The EU and the South American nations have been negotiating since 2000. The contours of a deal were agreed in 2019, but a final version still needs to be ratified.
Brazilian President Luiz Inácio Lula da Silva last month slammed the "major resistance from Europe" on getting the accord done, and criticised what he viewed as French "protectionism.”
His neighbour, Argentina’s new President Javier Milei, has sharply criticised the Mercosur deal. But in early January, the libertarian leader told German Chancellor Olaf Scholz that he wanted to see it swiftly concluded, according to Scholz's office. Berlin is in favour of the pact, despite the farmers' protests.
The combined Mercosur GDP was around US$2.6 trillion in 2022, according to the World Bank. The EU, with a GDP of around 16 trillion euros, is Mercosur's second-biggest trade partner, after China. Two-way trade between both blocs amounted to nearly 100 billion euros in 2021.
The trade accord aims to cut import tariffs on – mostly European – industrial and pharmaceutical goods, and on agricultural products.
The tensions from the farmers' revolt and within the European Union, accentuated by a cost-of-living crisis for many European companies and consumers, deal a tricky hand to Brussels.
Von der Leyen last week kicked off a "strategic dialogue" with representatives from Europe's agri-food sector to try to overcome what she described as "increasing division and polarisation.”
The initiative, continuing for several weeks, brings together policy-makers with farmers' groups, food supply companies and academics, with the aim of finding a consensus for Europe's farming future over the next five to 15 years.
Comments