The European Union’s agreement with the Mercosur countries, which would create the largest free trade zone in the world, with more than 700 million consumers, is hanging by a thread. And when its signing between the Union and Argentina, Brazil, Paraguay and Uruguay was almost achieved. France’s rejection and Italy’s last-minute doubts could kill the agreement, which is already in its home stretch. Their positions could unravel 25 years of work and negotiations at a key moment for the European Union, which faces attacks from the United States and Russia, and seeks new reliable partners while seeing the rules-based multipolar order falter under pressure from Trump. With Mercorsur, the EU is jeopardizing its prestige.
The timetable set by European and American institutions for signing the agreement – launched a year ago after a long period of vagueness – foresees that the process within the EU must be finalized this week. On the agenda were the vote in the European Parliament on several safeguard clauses for European products, the negotiation between the European Parliament and the Member States and finally the vote of the representatives of the Twenty-Seven to ratify the agreement. Then, a big signing ceremony is planned this weekend in Foz de Iguazú (Brazil).
“The signing of the agreement is of crucial importance, economically, diplomatically and geopolitically and even in terms of credibility on the international scene,” said Monday a spokesperson for the European Commission, responsible for EU trade policy, who said he hoped the agreement would be signed before the end of the year.
But everything is up in the air. On Sunday, French Prime Minister Sébastien Lecornu requested the postponement of the vote of European representatives (which, in reality, should have taken place on Friday). “The conditions are not met for a vote by the Council of the EU authorizing the signing of the agreement,” declared the French president. His request, which came from the very weakened government of Emmanuel Macron, dealt a hard blow to the agreement. But what is more important is the reluctance of the Italian Prime Minister, Giorgia Meloni, who informed the European institutions a few days ago that she preferred not to vote on the agreement this week for fear of protests from her farmers.
Without France, which benefited enormously from the negotiation of the agreement and which managed to introduce numerous safeguard clauses into the rules of the pact to protect its products from the Americans, and without Italy, the agreement will not be able to succeed. It takes a majority of countries (in terms of population) to support it. And assuming Poland votes no, the math won’t work if Paris and now Rome also reject it together.
The disappointment can be enormous. And all the more so since Italy is one of the countries that will benefit the most from the agreement with Mercosur, with which it shares trade of around 16.4 billion euros per year, since the agreement will eliminate customs duties on 91% of products.
If the vote is postponed, the agreement with Mercosur is dead, several European sources insist. Brazil, which this semester chairs the association of Latin American countries which, with Luiz Inácio Lula da Silva, did its best to advance the agreement, will leave the organization on January 1 in the hands of Paraguay, much more skeptical about the agreement. And in the background, there is also pressure from the United States with Donald Trump.
“Alone in the world”
“If we do not do it (if we do not sign the agreement with Argentina, Brazil, Paraguay and Uruguay), we will be alone in the world,” warned the President of the European Council, António Costa, a few days ago during a conference in Paris. “And it is not enough to have academic debates on how to avoid pressure between the United States and China,” said the former Portuguese prime minister, who invested great political capital to advance the agreement.
Critics of the deal in Europe say it hurts farmers and will flood the market with cheaper products. Although important guarantees have been introduced, not only economic (in terms of price) but also controls. In fact, last week, under pressure from Paris, the European Commission introduced new audits on agri-food imports to the EU.
Defenders of the agreement, such as Germany which strongly supports it, or Spain, emphasize that it is an opportunity to deepen ties with new reliable partners. They also argue that it offers the opportunity to explore new avenues to obtain critical raw materials and reduce dependence on China, especially after the impact of Trump’s tariffs. They also warn that if Mercosur countries do not sign with the EU, Beijing will strengthen its trade ties with them.
With the agreement with Mercosur, the EU is jeopardizing its reputation as a reliable partner. And in a critical week for their future, where the Twenty-Seven must decide whether they can maintain their support for Ukraine and cede Russian sovereign assets frozen by sanctions and hosted mainly in Belgium, currently opposed to this idea. And meanwhile, Europe is trying to take a seat at the table where the United States wants to sign peace between Russia and Ukraine.
About The Author
