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The EU’s trade commissioner has said he wants to conclude a trade deal with the Mercosur group of Latin American countries despite objections raised by France.
President Emmanuel Macron last week launched a full-scale attack on the proposed pact, saying it would be disastrous for the environment, French farmers and industry.
But Valdis Dombrovskis, the European Commission vice-president in charge of trade policy, told the Financial Times that a majority of EU countries backed the deal and that many of the French concerns would be addressed in the final agreement.
“I think the French side should have a look at what is actually in that final agreement, which we are still negotiating, and how far it addresses the concerns the president has stated,” said Dombrovskis.
Trade deals are handled at EU level so the commission has full negotiating powers. Any agreement must then be approved by a majority of member states, meaning France and Austria — which has also openly opposed the pact — would need several other countries to block its ratification.
“This is an agreement of major geopolitical and economic importance. We are committed to try to . . . finalise this agreement,” Dombrovskis said.
Mercosur, which includes Brazil, Argentina, Uruguay and Paraguay, is a valuable prize for EU exporters.
The agreement would create a market of 780mn people and save European companies more than €4bn annually in duties, according to the commission. EU companies have €330bn in investments in the Mercosur region. Trade in goods between the two blocs was worth €119bn last year.
Regarding Macron’s climate-related concerns, a commitment to implement the Paris Agreement, which pledges to keep global warming below 1.5 degrees Celsius, would be an “essential element” of the pact, Dombrovskis said.
Brussels was also working on additional sustainability requirements, including commitments to protect the Amazon. In addition, the EU had already introduced laws to ban the import of products made on deforested land and tax carbon-intensive imports, he said.
Dombrovskis said the two sides were “in the endgame” and progress could be “very fast”, although Mercosur had its own counter demands.
Javier Milei, Argentina’s new president, backs the deal, as does Germany, which has been pushing hard for a conclusion. German Chancellor Olaf Scholz said the agreement was “necessary” more than 20 years after talks began.
“I call on all actors to show maximum pragmatism and willingness to compromise so we can finally bring this to a successful conclusion,” Scholz told a joint press conference with Brazilian president Luiz Inácio Lula da Silva in Berlin last week.
The Brazilian leader attacked France as “protectionist” since the deal would allow more South American meat and agricultural produce into the EU.
An EU official said Macron had “internal political reasons” since opposition leader Marine Le Pen was against the pact. But previous trade agreements have boosted French exports such as cheese, wine and cars. “A lot of French companies will benefit from this. And the agricultural products industry will benefit a lot.”
Dombrovskis said he hoped to conclude by mid-2024, meaning it would be for the next European parliament, which gets elected in June, to ratify the deal.
To speed up its implementation the commission can provisionally apply the deal on goods trade as national governments and the European parliament agree. Investment protection would only take effect once national parliaments, some of which are deeply sceptical, have ratified the full pact.
Additional reporting by Guy Chazan in Berlin and Paola Tamma in Brussels
Source: Economy - ft.com
