The EU and the Mercosur countries (Argentina, Brazil, Uruguay and Paraguay) have closed the controversial trade agreement that had been resisted for decades. The president of the European Commission, Ursula von der Leyen, traveled to Montevideo, where a Mercosur summit was being held, to put the final touch on negotiations that have dragged on for years after reaching an agreement in principle in 2019, which It was reopened due to environmental concerns. “This agreement is not only an economic opportunity, but a political necessity,” said the German in a press conference in which, together with the leaders of those four countries, they announced the completion of the negotiations.
Now the countries will have to ratify the text, which has been strongly rejected by France, Poland and the Netherlands. Italy has also shown doubts at the last moment. “A political agreement is the first step on a long path to ratification. It is a beginning of the process, not the end,” acknowledged the European Commission’s Trade spokesperson, Ollof Gill, minutes before the deal was formalized in Montevideo.
Von der Leyen has placed emphasis on the need to sign what will be the largest trade agreement in history, covering a market of 700 million people. It will involve the gradual elimination of tariffs on 91% of EU exports to Mercosur, including industrial and food products, and 92% of Mercosur exports to the EU. In Montevideo, the German also referred to the ease of accessing public contracts as well as the simplification of procedures. “All this means many more opportunities for employment and growth in Europe,” he said. Furthermore, in Brussels they emphasize the need to strengthen ties with Latin America at a time when China is expanding its network with investments in the region.
Germany, whose economy in low times depends largely on exports, and Spain have been the European countries that have pushed the most for the agreement to go ahead. On the contrary, France has led the opposition – even with the ‘no’ from the Assembly – along with Holland and Poland for fear that the crisis in the countryside will worsen. Many farmers and ranchers, especially beef, dairy and cereal producers, have expressed their misgivings about competition at lower production prices in South American countries.
Environmental doubts and for the primary sector
Italy has put up problems until the last moment. “We have to verify that the Mercosur countries comply with the same obligations that we impose on our farmers in terms of respect for the rights of workers and the environment,” said the Minister of Agriculture, Francesco Lollobrigida, of the extreme right of Fratelli d’Italia, which demanded adjustments to be able to approve the text. On the part of Mercosur, the debate until the last moment has been regarding “flexibility” so that the countries that are part of the bloc can reach bilateral agreements. That is the ultimate objective of the Argentine liberal far-right, Javier Milei, who wants to negotiate with China and the United States.
Criticism also comes from social organizations due to the lack of commitments regarding the environment and labor rights, which they consider insufficient. The great concern is that labor exploitation is perpetuated in the primary sector of Mercosur and that the food sovereignty of local communities is put at risk by promoting large-scale production by prioritizing exports.
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