France remains opposed to a free trade deal in its current proposed form between the EU and South American countries due to "major" concerns about deforestation in the region, the government said on Friday.
The French government is to set out three demands for negotiations to continue, which would crucially include respecting the targets of the Paris Agreement on fighting climate change, it said in a statement..
The pact between the European Union and the South American Mercosur free trade bloc – comprising Brazil, Argentina, Paraguay and Uruguay – was agreed in principle last year after two decades of wrangling.
"The draft agreement has no provision to impose discipline on the practices of the Mercosur countries in the fight against deforestation," the French government said.
"This is the major shortcoming in this agreement and this is the main reason why, as it stands, France opposes the draft agreement," it added.
Its statement came as a report was delivered to Prime Minister Jean Castex that is hugely critical of the deal, describing it as a "missed opportunity for the EU to use its negotiating power to obtain solid guarantees" on environmental issues.
The 184-page report, which was seen by AFP on Thursday, looks in detail at the deforestation of the Amazon and rise in production of beef in the region.
The pact still needs to be ratified by all 27 EU member states. France is far from alone in voicing resistance.
German Chancellor Angela Merkel earlier this month expressed "significant doubts" over the deal, given the extent of deforestation, her spokesman said.
French President Emmanuel Macron has been a leading critic of Brazilian President Jair Bolsonaro, a climate change sceptic who scrapped restrictions on exploiting the Amazon's vast riches.
In an extraordinary spat last year, Macron rebuked the "extraordinarily rude" Bolsonaro after the Brazilian leader personally expressed approval for a Facebook post implying that Brigitte Macron was not as attractive as his own first lady, Michelle Bolsonaro.
Bolsonaro has hit back, accusing Macron of treating Brazil like "a colony or no-man's land."