EU Takes Step Toward Finalizing Trade Agreement with Mercosur

Strategic Insights -

The European Union has submitted the proposed trade agreement with Mercosur to the European Council for approval, aiming to overcome French resistance with "solid safeguards" to protect farmers. The deal, which would create the world's largest free-trade zone, had faced opposition from France, but the country's internal political crisis and growing isolation in the Council have diminished President Emmanuel Macron's influence in Brussels. The European Commission has pledged to address agricultural concerns with Mercosur countries, with both sides agreeing to implement safeguards to protect European producers.

Key Takeaways:

  • The European Union has submitted the proposed trade agreement with Mercosur to the European Council for approval, moving closer to finalizing the deal.
  • The agreement includes "solid safeguards" to protect European farmers, with Mercosur's preferential agricultural exports capped at a fraction of EU output (1.5% for beef and 1.3% for poultry, for instance).
  • The deal includes provisions for suspending tariff cuts for up to two years if European producers face serious risks from rising imports.
  • The Commission has pledged to address agricultural concerns with Mercosur countries, with a "ladder" approach to ensure harmonious implementation.
  • France has conditionally expressed support for the deal, with Trade Minister Laurent Saint-Martin describing himself as "reasonably optimistic."
  • The agreement would create the world's largest free-trade zone, with a market of over 700 million consumers.
  • The EU awaits the next steps, with the early signs indicating a softer tone from France, which had previously opposed the agreement outright.

Statistics:

  • 700 million: The number of consumers in the proposed free-trade zone.
  • 1.5%: The cap on Mercosur's preferential agricultural exports for beef.
  • 1.3%: The cap on Mercosur's preferential agricultural exports for poultry.
  • 30: The number of national and regional parliaments across the EU that must ratify the agreement for it to enter into force.
  • 15: The number of countries representing 65% of the EU population required to validate the deal.
  • 65%: The percentage of the EU population represented by the 15 countries required to validate the deal.
  • 10%: The threshold for Mercosur imports to trigger an investigation by the Commission.

Sources:

  • "Europe Business Review"
  • "Ouest France"
  • European Commission
  • European Council
  • French government spokesperson Sophie Primas
  • French Trade Minister Laurent Saint-Martin