BRUSSELS — EU free traders, rejoice: The European Commission is on the verge of shaking hands with Latin American countries over a trade agreement that’s been in the making for over two decades.
Trade talks with Mercosur countries — the pact groups Argentina, Brazil, Paraguay, Uruguay and newcomer Bolivia — are almost finalized as Brussels plans to announce the conclusion of the agreement as soon as this week, barring any last-minute surprise, during a summit of the Latin American nations in Uruguay.
With chief negotiators from the two sides having met in Brazil last week, technical discussions are essentially done, people close to the file told POLITICO, with a few chapters taken up the ladder and awaiting a nod at the highest political level.
Just three days into his new job, Maroš Šefčovič, the EU’s new commissioner in charge of trade, is holding “further contacts with his counterparts, also in the next hours,” Sabine Weyand, the EU’s top trade official, told European lawmakers on Tuesday, confirming earlier POLITICO reporting.
On the face of it, Germany — and its representative in the European Commission, Ursula von der Leyen — might be about to secure a massive win. This would meanwhile set an awkward precedent for Paris, which has rarely been outvoted on the EU scene.
The “Mercosur summit on Friday in Montevideo is probably the last opportunity for this and finalizing [the deal] now would be a win-win situation for both sides. The president of the Commission has the full mandate to do this and should, in our view, use it accordingly,” German Foreign Minister Annalena Baerbock said Tuesday.
The trade pact, heavily criticized by small yet influential constituencies such as farmers and NGOs, has crystallized tensions among EU countries. Berlin and another 10 EU capitals want to seal the deal as soon as possible, for various economic and geopolitical reasons — ranging from export opportunities to revive Germany’s flagging car industry, or to counter China’s spreading influence in the region.
Meanwhile, France adamantly opposes the agreement, arguing that it sacrifices its hard-pressed farmers to Germany’s industrial interests.
Distracted by domestic political headwinds, and with a government on the verge of collapsing over a budget crisis, French President Emmanuel Macron has struggled to rally enough capitals to oppose the agreement.
The French government, led by former Brexit negotiator Michel Barnier, could collapse as soon as Wednesday afternoon if left-wing and far-right opposition MPs join forces against Barnier in a no-confidence vote.
“The Mercosur agreement is a crucial tool for the EU’s strategic autonomy and would deliver on so many fronts of a concept that’s otherwise dear to Paris and Macron,” said one European diplomat, referring to the imperative that the EU not depend on rival powers for strategic sectors.
A French official said they hoped that von der Leyen would still wait before blessing the deal, in light of the complicated political moment in France.
In a win for Paris, the Dutch house of representatives came out against the Mercosur agreement on Tuesday, with three out of the four governing parties opposing it. Poland flipped last week to join the camp opposing the deal. Austria and Ireland have traditionally been more cautious on the agreement, while several countries, including Belgium, haven’t yet made up their minds. France is also trying to convince Italy, a long-standing supporter of the deal, to join the French camp over farmers’ concerns.
As things stand right now, Paris is getting closer to finding enough support to block the deal — a move that would require the support of countries representing 35 percent of the EU population.
Paris also objects to the fact that Mercosur producers are not subject to the same health and agricultural standards as their European counterparts. A recent Commission audit only added to that complaint, finding that Brazilian authorities cannot guarantee that the country’s beef exports are not treated by forbidden steroid hormones.
“We safeguard our sensitivities, in particular in agriculture. The EU’s health standards are non-negotiable and would be upheld by this agreement,” Weyand said on Tuesday.
“The limited quotas for sensitive agricultural products at lower tariff rates have been very carefully calibrated to avoid destabilizing EU markets. Not only would they be introduced gradually, but the Commission could take action to suspend them if serious market imbalances are identified in the EU,” the German civil servant said, using phrasing that appeared tailored to appease French MEPs.
Koen Verhelst contributed reporting.
This story has been updated.