Negotiations for a free trade deal between Mercosur and the European Union (EU) collapse amid a new storm. In 2019, on the 20th anniversary of the start of inter-bloc dialogue, an agreement was signed that is dead letter four years later. The EU added new environmental regulations that were rejected on Tuesday by the two major economies Mercosur, Brazil and Argentina. Criticisms from its partners have angered the Uruguayan authorities, who are unsuccessfully urging the bloc to move forward with Europe on one side and China on the other, while constantly threatening to break up Mercosur if the current paralysis continues.
The new stumbling block is the document presented by the Twenty-Seven in March, which contains environmental requirements related to imports from the agricultural sector, one of the economic engines of the countries that make up Mercosur: Argentina, Brazil, Paraguay and Uruguay.
“It presents us with a partial vision of sustainable development,” warned Peronist Alberto Fernández at the summit of Mercosur heads of state held this Tuesday in the Argentine city of Puerto Iguazú, on the border with Brazil. For the host of the meeting, the European proposal is “too environmentally oriented without taking into account the three dimensions of sustainability: environmental, economic and social”.
The Brazilian Luiz Inácio Lula da Silva was even more critical than his Argentinian counterpart. “It’s unacceptable. “Strategic partners do not negotiate on the basis of distrust and the threat of sanctions,” said the Brazilian president. Lula, who will become the bloc’s pro tempore president for the next six months, stressed that Mercosur members have no interest in deals condemning them to “perpetual roles as exporters of commodities, mineral products and oil”.
Statements can be an expression of great uneasiness, but also a negotiation strategy. Lula knows that the meeting of the presidencies of Brazil in Mercosur and Spain in the EU opens a six-month window that both countries want to use.
internal differences
The disagreement with the EU is exacerbated by the internal dispute over the Uruguayan leader, the conservative Luis Lacalle Pou. Since taking office in 2020, Lacalle Pou has advocated the need to make Mercosur more flexible in order to open the door to bilateral trade negotiations with third countries, a possibility that internal rules today reject. The Uruguayan President called for removing the obstacles that exist in negotiations with the EU in order to restore credibility and trust in the Union and also to advance a free trade agreement with China, one of the largest importers of the food produced by Mercosur.
“We’re not stupid, it’s better to go together. “It is the immobility that worries us,” the Uruguayan president brought up, before warning that if they could not reach a unified consensus, they would do so unilaterally.
Contrary to Mercosur rules, Uruguay conducted a feasibility study for a bilateral free trade deal with China and started talks with the Asian giant. However, in April, Beijing authorities curbed Uruguayan ambitions by announcing that they would rather move forward together with all of Mercosur.
criticism of Venezuela
Disagreements resurfaced with Venezuela. Paraguayan President Mario Abdo Benítez, together with his Uruguayan counterpart, called for a joint condemnation of the disqualification of the opposition María Corina Machado’s presidential candidacy in Venezuela.
“This is a fact that is in direct and scandalous contradiction to the plain language of human rights,” Abdo Benítez said of Machado’s disqualification. The Paraguayan President pointed out that restrictions on political rights through administrative channels “must always be viewed with suspicion and considered legally invalid”.
“Mercosur must send a clear signal to the Venezuelan people to move towards full democracy, which does not exist today,” said Lacalle Pou, the last of the Union’s four heads of state to speak at the summit in Puerto Iguazú . seconded. . In response, Fernández indicated that he was committed to dialogue and not interference with other countries.
The meeting ended with a communiqué signed only by Argentina, Brazil and Paraguay. Lacalle Pou declined to initial his signature on the joint document. Uruguay did not sign the joint communiqué and issued a single one, emphasizing the need for modernization of the bloc and a review of international integration tools “with a pragmatic and flexible approach to addressing the challenges of a changing world scenario”.
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