The chances of finally (and soon) concluding the trade agreement between the EU and Mercosur are dwindling. Outgoing Argentine President Alberto Fernández appears unwilling that one of his final acts in the Casa Rosada will be signing the agreement before handing over the baton to the far-right Javier Milei. “The conditions for signing the agreement have not been met,” the Foreign Minister said in recent days. He did this following other words from French President Emmanuel Macron in the same vein: “It is an agreement that is not good for anyone,” Macron complained at the climate summit in Dubai, hiding behind protective measures arguments. Environment. Both positions make it virtually impossible for Brazilian President Luiz Inácio Lula da Silva and European Commission President Ursula von der Leyen to sign the pact this week. In recent months, both had harbored hopes of finally resolving a trade agreement that has been waiting for ratification for more than four years.
This message delivered by Macron on Saturday is very different from the one delivered by Lula and the President of the Spanish Government, Pedro Sánchez, on the same stage the day before. The two met on the sidelines of COP28 to give negotiations a final “political push” so that an agreement that has been negotiated for more than 20 years can be concluded before the end of the year. “This historic step, beneficial for both regions, will allow us to strengthen strategic projects in the areas of renewable energy, green hydrogen, the fight against deforestation or digital transformation,” emphasized Sánchez on the social network after the meeting X (formerly Twitter).
After Milei’s victory in the second round of Argentina’s elections on November 19, all eyes were on the situation in Buenos Aires. Finally, Milei spoke about his future chancellor Diana Mondino, who called on the outgoing president to sign the pact: “I hope that the agreement will be finalized next week.” But the outgoing government is not ready to take this step, because, according to Fernández’s foreign minister According to Santiago Cafiero, “it is a bad agreement that has a negative impact on industry and agricultural exports.”
It’s a pleasure to see my friend again. @LulaOfficial to give political impetus to the EU-MERCOSUR agreement.
This historic step, beneficial for both regions, will allow us to strengthen strategic projects in the areas of renewable energy, green hydrogen, the fight against deforestation or… pic.twitter.com/IiI8xKQ5pM
— Pedro Sanchez (@sanchezcastejon) December 1, 2023
The Spanish government emphasizes that the president has maintained contacts with all heads of state and government, including Argentina’s Fernández, with whom he has a good relationship, to try to lift the block on the agreement, it is said Carlos E. Cué. It is even noted that it will take a few more weeks before the year ends successfully. Achieving what now seems impossible would be a remarkable achievement of the Spanish EU Presidency: the EU-Mercosur trade agreement was reached in 2019 after 20 years of negotiations, but neither party has ratified it since then. The EU is primarily trying to introduce more environmental standards, although Latin America points out that this is more of a protectionist excuse.
The window of opportunity is closing
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That success now seems a long way off, and that’s not just because of the harsh stance taken by Argentina and France. The European Commission’s executive vice-president and its trade chief Valdis Dombrovskis had planned to travel to the Mercosur summit in Rio de Janeiro this week to try to reach an agreement. Negotiating sources speak of important progress in recent months. But given the situation of the last few days, the Latvian finally gave up on the trip. If an agreement is not reached later in 2023, the window of opportunity will close, firstly due to the proximity of the European Parliament elections, but also due to the presidencies of Spain in the EU and Brazil in Mercosur, which are the main supporters of the agreement also be finished.
Nevertheless, Chancellor Olaf Scholz and President Lula tried from Berlin this Monday to maintain hope. Germany, always looking for new markets to export its industrial products, is the great European power pushing for the signing of the agreement with Mercosur. “I ask everyone involved to show as much pragmatism and willingness to compromise as possible and to conclude the agreement,” said the German together with the Brazilian. “We insist that it be celebrated quickly,” he added, stressing that neither he nor Lula will give up their efforts.
Both leaders chaired the first high-level intergovernmental consultations between the two countries since 2015, marking the recovery of their relations after Jair Bolsonaro’s time as head of Brazil’s executive branch. Lula and Scholz signed a memorandum of understanding and several agreements to strengthen cooperation in areas such as energy transition, science and agriculture. Brazil is already an important partner for Berlin – around 1,400 German companies operate there – but the relationship holds enormous growth potential in the areas of green energy production and raw materials. Germany, which wants to reduce its dependence on China, sees Brazil as a democratic and safe country in which to invest. The trade agreement would make transactions easier. However, if there is a delay, Berlin would further strengthen relations through bilateral agreements.
The main protagonist of the meetings that Lula attended with several of his ministers was the EU-Mercosur agreement, which both leaders believe is possible to move forward. In fact, Scholz said he was “convinced” that if the negotiations with the European Commission were successful, there would be a majority in both the EU Council and the European Parliament, pointing to criticism of Macron over the weekend, which he said didn’t respond directly. For Berlin, the agreement would be “a great step forward,” said Scholz.
Lula promised to do everything he could to find a solution. “I hope that the European Union will decide whether it is interested in concluding the agreement,” he said, recalling that the American bloc (Argentina, Brazil, Paraguay and Uruguay) has been working on it for 23 years. “I remain persistent because if I had not been persistent, I would not have become President of the Republic of my country, because I lost three elections before I won them,” he recalled during the press conference with Scholz.
The Brazilian president wanted to emphasize that it is not just about Macron: “This also happened with Sarkozy, with all the French presidents, Chirac, our socialist colleague François Hollande… None of them wanted to propose an agreement with Mercosur because of the crisis.” internal political and financial institutions of France. And he assured that he would respect his position and be aware that, in addition to France’s refusal, there is also Argentina’s refusal.
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