Despite protests
EU clears the way for Mercosur agreement
Until the end, European farmers tried to prevent the trade agreement with the South American Mercosur states. But now the majority of EU countries have approved it.
The European Union has rarely approached a finish line so slowly, but now the time has come: after more than 25 years of marathon negotiations, the signing of the Mercosur agreement is imminent.
Since the EU summit in December, over Christmas and the turn of the year, there have been intensive negotiations within the community because, after France, Poland, Austria and Hungary, Italy surprisingly also expressed concerns.
These agricultural member states fear that their farmers will come under massive pressure from South American competition, which may be able to produce more cheaply and is subject to fewer standards.
The Commission then suggested that European money for agriculture be made available earlier than planned. In addition, some protective clauses will be made even narrower. This apparently brought Italy back on board, and that is enough for the so-called qualified majority of 15 member states, which represent 65 percent of the EU population.
The Common South American Market (Mercado Común del Sur, MERCOSUR) is a regional association of the South American states of Argentina, Brazil, Paraguay, Uruguay, Venezuela and Bolivia.
Venezuela’s membership has been suspended since 2017. Bolivia is initially not part of the MERCOSUR agreement with the EU.
MERCOSUR was founded in 1991 and aims to promote regional integration through political, social and economic cooperation.
Source: Federal Ministry for Economic Cooperation and Development, dpa
“Finally,” says Bernd Lange, chairman of the powerful trade committee in the European Parliament, happily. “In doing so, we have made it clear that in this geopolitical situation we stand for a fair, reliable partnership with countries that also want a reliable partnership on an equal footing.” Now “the traffic light for the Mercosur agreement and for the safety net for European agriculture is green,” says Lange. And the concerns of the critics have been “satisfied”.
Greens see significant risks to the environment
Anna Cavazzini from the Greens in the European Parliament takes a more critical view. She speaks of “still legitimate concerns” because the agreement poses “significant risks for the environment, but also for local agriculture”. Cavazzini considers “outdated mega trade agreements” to be outdated and advocates for “sectoral partnerships that advance sustainable economic relations and human rights.”
The Mercosur agreement promises the largest free trade area in the world with low tariffs, new export markets and more than 700 million consumers.
But it’s not just that, emphasizes Agathe Demarais from the European Council on Foreign Relations. The academic at the European think tank believes that the deal is “great for Europe’s political and economic influence in the world.” Such free trade agreements with new partners are “the best answer to US tariffs, growing global protectionism and trade tensions with China.”
If Mercosur had gone wrong, Demarais says, it would have only pushed Latin American countries closer into China’s orbit. The agreement also supports Europe’s search for new sources of important raw materials, which are not least important for the transition to clean energy.
Access to important raw materials
Brazil, for example, has around 20 percent of the world’s reserves of graphite, nickel, manganese and rare earths. Argentina has the world’s third largest reserves of lithium, a key material for car batteries. “With this agreement, Europe will also become more independent of China,” Demarais is certain.
As soon as the written consent of the qualified majority has been received, Commission President Ursula von der Leyen also has the mandate to sign the contracts. That could happen in Paraguay at the beginning of next week. The country took over the presidency of the Mercosur Group at the turn of the year.
