Background on the Negotiations
The European Union (EU) and Mercosur, a South American trade bloc comprising Argentina, Brazil, Uruguay, and Paraguay, have been negotiating a free trade agreement for over two decades. In December 2021, both parties announced the conclusion of negotiations for this comprehensive agreement. However, before the deal can take effect, it must be ratified by a majority of EU member states.
France’s Concerns and Demands
France, led by President Emmanuel Macron, is among the EU countries hesitant to sign the agreement. France’s Minister of Economy and Finance, Roland Lescure, stated in an interview with the German newspaper Handelsblatt that “in its current form, the treaty is not acceptable.”
- Strong Protection Clause: France insists on a robust and effective protection clause for its agricultural sector.
- Uniform Standards Application: The EU’s production standards must also apply to Mercosur countries.
- Import Controls: France demands stricter controls on imports to safeguard its agricultural interests.
These conditions are crucial for France to provide legitimate legal protections to its agricultural sector, which is concerned about increased competition from Mercosur countries.
EU’s Plans and France’s Response
The EU, under President Ursula von der Leyen, aims to sign the trade agreement during an upcoming Mercosur summit in Foz do Iguaçu, Brazil. However, France has requested a delay in the agreed-upon December timeline, citing that “the conditions are not met for any member state vote on authorizing the agreement’s signature.”
To address French concerns, the EU proposed a “strengthened monitoring mechanism” for vulnerable agricultural products like beef, poultry, rice, and ethanol. This mechanism would allow the EU to intervene in the market if destabilization occurs.
Next Steps and Timeline
Before the French government’s statement, the EU Executive had announced plans to obtain member states’ approval during the week. The European Parliament is set to vote on safeguard measures on Tuesday, aiming to alleviate farmers’ concerns—especially those in France.
The EU-Mercosur free trade agreement seeks to boost European exports of automobiles, machinery, and wines to Mercosur countries. In return, the agreement would facilitate the import of beef, sugar, rice, and soy from South America.
If approved, this agreement would create a common market of 722 million people.
Key Questions and Answers
- What is the EU-Mercosur trade agreement? It’s a proposed free trade agreement between the European Union and Mercosur, aiming to boost trade in various sectors, including automobiles, machinery, and agricultural products.
- Why is France hesitant to sign the agreement? France is concerned about protecting its agricultural sector from increased competition and has demanded stronger safeguard measures.
- What are the conditions set by France for ratifying the agreement? France requires a robust protection clause, uniform application of EU production standards in Mercosur countries, and stricter import controls.
- What is the next step in the EU-Mercosur trade negotiations? The European Parliament will vote on safeguard measures, and the EU aims to secure member states’ approval before the Mercosur summit in December.
