Will the EU-Mercosur partnership get off the ground?
The EU-Mercosur Partnership Agreement foresees creation of the world's largest free trade zone. It took 25 years to reach an agreement that is now on the table for ratification. However, the process the European Commission has put in place is being challenged by several sectors.
READ MORE : http://www.euronews.com/2025/09/16/will-the-eu-mercosur-partnership-get-off-the-ground
Subscribe to our channel. Euronews is available on Dailymotion in 12 languages
00:00The EU-Mercosur partnership agreement foresees the creation of the world's largest free trade zone.
00:20It took 25 years to reach an agreement that is now on the table for ratification.
00:26However, the process that the European Commission has put in place is being challenged by several sectors.
00:33There are also a few member states highly skeptical of the deal, like we will reveal in this EU Decoded.
00:41Mercosur is a South American trade bloc comprised of Argentina, Brazil, Paraguay and Uruguay.
00:48The agreement with the EU will create a market of 780 million consumers, representing 25% of world trade.
00:58Many European products now pay high export tariffs to the Mercosur bloc, such as cars 35%, wine and spirits up to 35%, cheese 28%, machinery up to 20%.
01:14With the deal, those tariffs will be eliminated or significantly reduced.
01:20Farmers, environmentalists, some groups in the European Parliament and a few member states oppose the deal.
01:26We'll explore this later in the programme, but let's hear what some Europeans think.
01:31In fact, it's in my concurrence, especially with the French industry and its agriculture, with the South American industry, which produces with different norms and has a lot lower cost.
01:43On the other hand, it's not possible to sacrifice food and on the other hand, it's possible to sacrifice peasants.
01:49That it's good, because our partners on the world, with whom we have always so good trade trade, are the things not so clear as before.
01:58But I think it's also geregelt, that it's the same as we have the same concerns as we have here our landowners.
02:05The whole agreement contains parts such as the political part, which have to be ratified by national and regional parts.
02:35It is a risky undertaking, because if the whole agreement is ratified by national parliaments, it means that some of them may oppose the text,
02:45as it happened already in the past, when national parliaments such as the Dutch one or the Austrian one opposed the agreement.
02:53So, the European Commission has decided to separate the trade part, which falls under the exclusive competence of the EU, so that the Council will vote the text, the member states voting by qualified majority,
03:08and the text will be also voted by the European Parliament by simple majority.
03:12This way, the trade part has more chances to be implemented quickly.
03:16Which member states are more sceptical of this agreement, why is that, and how many do we need in terms of vote for this agreement to be approved and entered into force?
03:28France has long led the opposition to the agreement, on the ground that it would create unfair competition to its farmers.
03:36But it may have changed today, because the European Commission has given assurances that it would strengthen controls over imports coming from Mercosur countries and their impact on the EU markets.
03:51But Poland now is stepping up against the deal.
03:56Polish Prime Minister Donald Tusk said he was opposed to the agreement, but it remains uncertain whether he's going to be able to gather a blocking minority against the deal.
04:08Because indeed, to be signed, the deal requires 15 member states in favour of it, and a blocking minority would require 5 member states representing 35% of the population.
04:20The agricultural sector is one of the biggest critics of the agreement, which is why the European Commission recently added safeguards.
04:30Quotas that limit the import of products considered more sensitive, such as beef, poultry, sugar, rice, and honey.
04:39Increased controls that may lead to the suspension of imports of a certain product if they increase by more than 10% or prices fall by more than 10%.
04:48EU pesticide and animal welfare rules will have to be followed by Mercosur countries, a 6.3 billion euros fund to help farmers affected by market crises.
05:00I'm joined now by Karel Lannot, Chief Executive of the Centre for European Policy Studies.
05:07Can the EU afford not ratify this agreement, considering that it had to make a lot of concessions in the trade deal with the U.S. that will raise tariffs to 15%?
05:19We need to know, let's say, that the geopolitical situation, since it was negotiated, started to negotiate 25 years ago until today, has changed so much.
05:28If we go to Latin America, and we see this also for Mercosur, the most important trading partner has become China.
05:33So, if we know, say, we need to be respected as a partner, also, for example, with the United States, then we should respect ourselves and say we absolutely need to conclude this agreement, also to become a more important trading partner for Latin America.
05:49And if we were not to do this, I mean, it will just, after this, I would say, almost scandalous EU-U.S. agreement, just put the EU in a corner of being an unreliable partner.
06:01The partnership will also create access to the essential raw materials as an alternative to China that concentrates a lot of that production.
06:10So, how significant is this for the European industry, for instance?
06:15It's, again, an opportunity for us, I mean, to reduce, I mean, drastically this huge dependence which we have from China, which was built up without us noticing it.
06:25And now we have an opportunity to say, look, we'll do it with another region, we will just reduce our huge exposure to China and to say, look, we will make sure that Brazil can, or, say, Argentina or Peru can also develop their commodities, or, say, their raw materials export to Europe.
06:42So, in addition to Mercosur, the EU has also revised an agreement with Mexico.
06:47So, where should the EU look next for partners?
06:51We should, above all, as a policy, after what the U.S. has done to us, let's say, in this trade agreement from the 18th of August,
06:58make sure that we find a group of countries which have the similar approach to trade and to the maintenance, above all, of the trading system,
07:09which we have in the post-World War II order, where we go for a system, underscored by the WTO, the World Trade Organization,
07:17where we apply these principles of most favoured nation clause, and where we want to have, as the EU wants, as much as possible, zero tariffs.
07:26International trade is one of the arenas in which the EU projects its political and economic model.
07:33Some tout economic benefits and new markets, while others warn about the risks of more concessions to multinationals,
07:41increasing risks of deforestation in Amazonia, and consumer losses.
07:46Given the tariffs recently imposed by the U.S. on the bloc,
07:50some European governments most critical of the agreement with Mercosul may now change their minds.
Be the first to comment