What is behind the postponement of the signing of a trade agreement between Mercosur and the European Union

Signing of the agreement between Mercosur and the European Union is postponed After almost 25 years of negotiation, it seemed that the free trade agreement between Mercosur and the European Union would finally be signed. The European Commission planned to seal the pact that creates the world’s largest free trade zone this Saturday (20). The plan, however, changed after Italy sided with France to demand a postponement and seek greater protection for its agricultural sector, leaving the process to end until January. “We have contacted our Mercosur partners and agreed to slightly postpone the signature,” European Commission President Ursula von der Leyen said, adding that she was “confident” there is a sufficient majority to conclude the deal, according to Reuters. According to sources, the leader confirmed that the conclusion of the agreement was postponed until January. This has led agents to recalibrate their expectations about the future of the treaty. On Friday (19), diplomats informed AFP that the signing should take place on the 12th, in Paraguay. French opposition French President Emmanuel Macron said the country will not support the trade deal without the inclusion of new safeguards for French farmers. France is today the main focus of resistance to the treaty within the European bloc. “I want to tell our farmers, who have expressed the French position since the beginning, that we consider that the accounts are not closed and that this agreement cannot be signed,” declared Macron. The statement was made to the press before one of the European Union summit meetings. He anticipated that France will oppose any “attempt to force” the adoption of the trade pact with the South American bloc. 👉 Among French farmers, the agreement with Mercosur is widely seen as a threat, given the fear of competition with cheaper Latin American products produced under different environmental standards than European ones. Italy remains uncertain Giorgia Meloni, Prime Minister of Italy, upon arrival in Rio for the G20 Alex Ferro/G20 The Prime Minister of Italy, Giorgia Meloni, stated that the country can support the trade agreement between the European Union and Mercosur, as long as the concerns raised by Italian farmers are met. “The Italian government is ready to sign the agreement as soon as the necessary answers are given to farmers, which depends on the decisions of the European Commission and can be resolved quickly,” he declared. Germany and Spain support agreement Friedrich Merz, Chancellor of Germany AFP via Getty While France maintains resistance, the German Chancellor, Friedrich Merz, and the Prime Minister of Spain, Pedro Sánchez, defended that the bloc advances in the agreement politically signed last year with Argentina, Brazil, Paraguay and Uruguay. Germany, Spain and Nordic countries believe that the treaty can help offset the effects of tariffs imposed by the United States on European products and reduce dependence on China, by expanding access to minerals and new markets. “If the European Union wants to maintain credibility in global trade policy, decisions need to be taken now,” declared the German Chancellor. READ ALSO: Mercosur-EU Agreement: European Council meets to approve or block the 25-year negotiation Why is the European Union-Mercosur agreement the subject of so much dispute in agriculture? Owner of the 4th largest supermarket chain in France threatens to boycott Mercosur products How approval works and what is at stake The process is discussed in the European Council, the body responsible for formally authorizing the European Commission to ratify the agreement. Unlike what happens in the Legislature, where a simple majority is sufficient, the Council requires a qualified majority: the support of at least 15 of the 27 countries in the bloc, representing 65% of the European Union’s population. It is precisely at this stage that the main political risk of the agreement not moving forward is concentrated. Although the public debate is concentrated on agribusiness — the main focus of European resistance — the agreement between Mercosur and the European Union is broader and goes beyond trade in agricultural products. The treaty also covers topics such as industry, services, investments, intellectual property and productive inputs, which helps to explain the support of different economic sectors in the European bloc. The expectation was that, if the agreement advanced in the Council, Ursula von der Leyen would travel to Brazil at the end of this week to ratify it — which should no longer happen this year. Lula talks to journalists at Palácio do Planalto Adriano Machado/Reuters Brazil remains optimistic Shortly before the Prime Minister of Italy spoke about the agreement, the president of Brazil, Luiz Inácio Lula da Silva (PT), reported that he had spoken by telephone with Giorgia Meloni. According to Lula, the prime minister said she was not against the treaty, but reported facing “political embarrassment” due to pressure from Italian farmers. Also according to the president, Meloni stated that he is confident that he will be able to convince the sector to support the agreement. “If we have patience for a week, ten days, at most a month, Italy will be with the agreement,” said Lula. The head of the Executive of the European Union, Ursula von der Leyen, announces an 800 billion euro EU plan against the possible US exit from Ukraine, on March 4, 2025. Yves Herman/ Reuters

Source link