If this had worked out, the world's largest free trade area would have been created. In the European Union and the Mercosur countries (Brazil, Argentina, Paraguay and Uruguay), there are a full of about three-quarters of a billion people who produce a full of 1 4th of planet GDP. Soybeans, beef or sugar, cars, chemistry, medicines would go to Europe work free. Bilateral investments in America, above all, would besides increase rapidly.
Sounds like a wet dream of 20th-century liberals? It is indeed. The talks on free trade between the EU and Mercosur began behind the Spanish Presidency of the EU in 1995. In the following years, both blocks signed a framework agreement on cooperation and declared their desire for further approximation, but there was no good time for this. The Union expanded eastward, South America focused on cooperation with dynamically developing China.
Finally, in 2019, the EU and Mercosur signed an association agreement that included liberalisation of bilateral trade. For the Union, it was an thought to strengthen its global position, for the Mercosur countries – to find a fresh outlet. The ratification of the agreement on both sides of the ocean was supported by food companies, fertilizers, plant protection products, agricultural machinery, etc. The smaller ones opposed it Farmers. Those in Europe were afraid of flooding the marketplace with inexpensive products, in America – further concentration of lands in the hands of global corporations. The agreement was besides criticised by environmentalists who pointed out the disastrous consequences of agricultural improvement for The Amazonian Forest and Gran Chaco forests.
There was no ratification. Europe discussed a lot about Green Order and frightened the president of Brazil Jaira BolsonaroWhich environmental issues he didn't care about. She did not want to put the hand of European trade in actions contrary to her key values. So she came up with amendments to the agreement – e.g. blocking imports of products from illegal logging areas. erstwhile a more environmentally delicate socialist came to power in Brazil Lula de SilvaEurope seemed to yet get along. No way. Lula has inhibited the cut-out of the Amazon Forest, but there is no burning to ratify the agreement with the EU.
“Lula da Silva has already declared in his election run that he does not agree with the text of the agreement negotiated in 2019”, notes Bartłomiej Znojek, PISM analyst on Latin America. – He felt that in this form the agreement would hit the Brazilian manufacture and opposed the beginning of the public procurement marketplace for EU companies. As president Lula, he besides criticised the EU for its Green Deal policy unilaterally imposing additional commitments on Brazil and calling it "green neocolonialism".
Pale oil plantation in Brazil. Fig. Miguel Pinheiro/CIFORZnojek adds that the situation in another Mercosur associate States besides does not necessarily favour ratification of the agreement with the EU. In the face of the deep crisis Argentina, the erstwhile government was not willing to liberalise marketplace access, and the ruling ultraliberal president since December Javier Milei He's critical of Mercosur. Uruguay is negotiating its free trade agreement with China, contrary to the block's regulations, and Paraguay has threatened that if it is not possible to communicate with the EU, the talks must simply be terminated. “Almost 25 years after the start of negotiations, the motivation to adopt an agreement on the side of the South American block is clearly smaller,” the expert says. “This involves another options, primarily the increasing importance of China as a key trading partner in the region.
The Mercosur countries are afraid of beginning up to the Union industry, which could jeopardise their own development. The point is that EU-Mercosur cooperation would be uneven. "We will not agree to an agreement that brings us to the function of subcontractors," said president Lula de Silva. Food would flow 1 way, the another – products of highly developed industry. South American countries believe that this would not aid them make their own production and technology and strengthen their peripheral position. After all, they have decades of experience with specified dealings. For example, Argentina under the influence of the United States became 1 of the largest producers of soya and maize. At the same time there is nothing to feed its impoverished, inhabiting neighborhoods of poorness of citizens (I mention to the book for interesting details Hunger Martína Caparrósa).
Strawberry field in Argentina. photograph by Nahuel Berger/World BankIn Europe, France is the biggest brake for ratification of the EU-Mercosur agreement. During the December COP28 summit in Dubai, president Emmanuel Macron said that “he is not in favour of this agreement due to the fact that he does not know how to explain it to the French [...] farmer.” Farmers most likely didn't believe him due to the fact that opposition to the Mercosur deal was 1 of the main themes of later protests.
South American farmers do not gotta meet a number of EU restrictions, may usage banned plant protection products in Europe and pay lower wages. In addition, they have no winter, so they harvest twice-three times a year. In a word, they produce much cheaper, which is unfair competition for the European agri-food market.
Farm organisations across the EU are of the same opinion. The slogans against the Mercosur agreement accompanied protests in Brussels, which attracted Belgian, Italian and Spanish farmers among others. They were besides built by farmers in Ireland and Spain. In Poland, the agreement criticized, among others, the Union of Breeders and Meat Farmers. Argentine beef is 1 thing – after ratification of the agreement Poland could easy lose its position European chicken queen.
The conventional supporter of strengthening trade ties with South America is Spain, but in fresh years Germany has been the loudest demand. Chancellor Olaf Scholz stressed the request to ratify the EU agreement with Mercosur even at the summit of agricultural protests in Europe. The agri-food sector is not as crucial for Germany as for France, for example, and in the liberalisation of trade with South America they see a chance to increase from the economical crisis caused by the pandemic and cut off from inexpensive Russian gas. The weak German automotive manufacture would be happy to hug the fresh marketplace for its combustion cars, and the chemical manufacture covers its hands to export to Mercosur countries, among others. banned plant protection products in the EU.
In addition, the greening German economy needs lithium. This uncommon metallic is needed to produce batteries and so it happens that its immense deposits are located in South America. Germany imports it mainly from Chile's remaining outside Mercosur, but after a trauma with Russian gas they search to diversify the supply chain. Rich in the deposits of lit. Argentina and Bolivia (the second is on the threshold of joining Mercosur) will gladly come here in sukurs. The ecological transformation of Germany is besides expected to aid green hydrogen – fuel of the future, which is hard to transport so far. Nevertheless, Brazil is already starting production on a large scale. A free trade agreement with the Mercosur countries is not essential for Germany to import these goods, but it would surely make it easier.
Germany insists that ratification of the agreement is not so much in its own interest as the full of the Union. Olaf Scholz's comments on the subject repeat the subject of "strategic autonomy in Europe" and "geostrategic importance of specified agreements". Of course, there is simply a grain of fact in this: access to the natural materials needed for green transformation (and independency from China in this regard) is crucial for Europe, and after a series of EU crises, any global success would be needed. If the Union does not enter the South American market, it is likely to benefit already strong in China. Moreover, European manufacture – not only German – will benefit from ratification of the agreement. This does not change the fact that, from the position of many EU countries, losses outweigh benefits.
Poland besides belongs to them, although this is not a clear issue. The deepening of the crisis of the German economy does not service the Polish economy dependent on it. Polish companies from the automotive industry, as well as the chemical or electromechanical industry, would most likely be good at ratifying the agreement. In turn, consumers tired of inflation would enjoy lower prices (e.g. reasonably costly beef at present). What, though, if Polish agriculture had a lot to lose, would the emissions of South American countries only grow and global agrocorporations strengthen their hegemony? In specified a unstable geopolitical situation, we should in no way base our food safety on anti-pod import, and if we gotta import food from outside the EU, it is better from the war-torn Ukraine, whose strengthening is in our immediate interest.
Farm workers in Paraguay. photograph Banco Mundial AméricaThis is not the first time Germany has tried to sale its abroad policy in the EU policy package. Policies were besides to be beneficial for Europe as a full austerites in the euro crisis, moving distant from the atom, importing Russian gas or close-up with China. With all due respect to the good intentions behind at least part of these projects, we thank this kind of European leadership.
Fortunately, everything points to the fact that the ratification of the Mercosur agreement will not happen for the time being, at least not before the European elections, even though the European Commission – and more specifically the EU Trade Commissioner Valdis Dombrovskis and president Ursula von der Leyen – has pursued this. "Politico" reportsThat Macron threatened von der Leyen in a text message that if he didn't let it go, he wouldn't support her candidacy for a second term. At the end of March, a visit to Brazil is made, but it is improbable that he will change his head about ratification so far.
"I started my career [from working on an agreement with Mercosur – a car.] and I will most likely quit before it is ratified," said Michael Hager, Chief of Cabinet of Commissioner Dombrovskis recently. I hope he's right.
