The EU has decided on a huge free trade zone with the South American Mercosur countries. But there is still resistance; France in particular criticizes the project.
On the green pastures of the Fazenda of Ellen Marina in Lorena in the hinterland of São Paulo grass brown and white cattle, the fright of European farmers: “These are our famous green cattle, green because they eat 90 percent grass. No animal goes out without the strictest controls.
The topics of agriculture and cattle breeding are still one of the largest conflict points when it comes to the conclusion of the EU Mercosur trade agreement. The text has been after a 25-year negotiating marathon since December last year. However, the contractual work must still be found by the parliaments of the member states on both sides of the Atlantic – with an uncertain result. Because there are strong opponents, especially France. However, critics of the agreement are not only worried about lower environmental standards in the Mercosur countries. And Europe’s farmers fear the cheap competition from South America, where wage costs are significantly lower.
Best answer against Customs Protectionism
Brazil’s President Luiz Inácio Lula Da Silva, who was currently on a state visit to France and will take over the Mercosur presidency on June 6th, again: “If Brazilian and French farmers know what possible, there is no reason to reject the agreement. I will return to Brazil with the certainty with Macron Lula is certain. The agreement is also the best answer to the uncertain situation that came from returning to unilateralism and customs protectionism, said Brazil’s head of state.
And cattle breeder Marina also has no understanding of concerns. “We are the biggest beef exporters in the world. It is not understandable what France wants,” she says. According to the cattle breeder, everyone wanted to sell without trade barriers. That would be a situation from which both sides benefited: the EU and Mercosur.
Alternative against Trump’s customs chaos
US President Donald Trump’s customs chaos has now become involuntarily the supporter of the dealers’ supporters, political scientist Paulo Velasco from the State University of Rio de Janeiro also believes: “This is a favorable time. Because the EU and Latin America suffer from the uncertainty that has created the trade policy and customs chaos of US President Donald Trump. The common trading zone would be an alternative, “emphasizes Velasco.
He believes that this would give the current negotiations more tailwind – and maybe not France, but other countries such as Poland and the Netherlands move on the agreement.
Does the agreement intensify the crisis in Argentina?
Nevertheless, the criticism of environmentalists continues: the deal would strengthen an economic model that would bring inequality and environmental destruction, is an argument. The winners are the agricultural industry of South America and the car manufacturers and pharmaceutical companies in Europe. This is exactly what Mauro Álvarez is worried. He is the president of the Association of Medium -Sized Enterprises in Argentina and also works in the textile sector. In his factory in Berazategui, in the industrial belt of Buenos Aires, he produces work clothes.
Argentina’s industry is currently weakened anyway, which makes competition with Europe even more difficult, says the entrepreneur: “I am not against trade agreements, neither with the European Union, the USA or China. But we are currently experiencing a critical moment. The current government has been opening the market for all imports for two years. says Álvarez. This is exactly what has been experienced, the entrepreneur recalls. The whole thing ended in the largest crisis in the country, with the destruction of jobs and the domestic industry.
Negotiations with potential partners
That is why the trading emissions would be gradually dismantled, says the foreign policy consultant Marcelo Scaglione. He assumes that there will be no major resistance in the coordination in the South American parliaments because it opened a large and very qualitative market for its own products. “Europe needs food, it takes energy to reduce the dependence on Russian gas, and minerals are needed to transition to electromobility,” explains the political advisor.
So should the deal fail in the end? Negotiations with other partners are also running in parallel in South America. An agreement was signed with Singapore in 2023, Uruguay also flirts with a deal with China. And in Argentina, the libertarian President Javier Milei kept declaring that he is striving for a bilateral free trade agreement with the USA. Experts – especially at the moment – consider this to be a rather hopeless undertaking.
EU more important than China
Political scientist Velasco believes that neither China nor the USA is an alternative to the contract with the EU. Of course, China is an extremely important trading partner, and Trump’s tariffs would let China win on the ground worldwide, not only in Latin America. “But China competes less with the European market, because it primarily buys raw materials from us: iron ore, soy, oil,” Velasco continues. “The European market is a higher -quality market. In addition to our agricultural products and oil, we also sell industrial products, electronic components, aircraft products. Therefore, the EU is far more than China, also an interesting alternative to the difficulties when selling to the USA.”
And: At least the commercial part could also be put into force against the resistance of France. This would be possible through the so-called splitting process. The EU Commission could split the contract into an economic – that is, commercial – and a political part. The economic part would then be decided by a qualified majority in the EU Council and a simple majority in the EU Parliament. So the resistance of some member states could be avoided.
