EU states back controversial Mercosur deal with Latin American countries | European Union
European Union member states have backed the biggest-ever free trade deal with a group of Latin American countries, ending 25 years of negotiations but further fueling tensions between farmers and environmentalists around the bloc.
The contentious Mercosur agreement with Argentina, Brazil, Paraguay and Uruguay immediately sparked protests in Poland, France, Greece and Belgium; Farmers blocked major roads in Paris, Brussels and Warsaw.
Opposition parties on the far left and far right in France also embraced the deal agreed in principle on Friday to try to overthrow Emmanuel Macron’s government with a motion tabled for a vote of no confidence.
Member states’ approvals put an end to months of wrangling in Brussels and a last-minute hiccup before Christmas when Italy’s opposition threatened to collapse the deal.
France, Poland, Austria, Ireland and Hungary voted against it, while Belgium abstained. Italy’s Giorgia Meloni, long seen as the key vote, backed it, allowing the landmark deal to pass under qualified majority voting rules.
The agreement must be approved by the European Parliament to enter into force, but since trade falls under the exclusive jurisdiction of the European Commission, commission president Ursula von der Leyen is expected to travel to Paraguay on Monday to officially sign the agreement.
Von der Leyen said the EU had listened to farmers and described the agreement as a “win-win deal” providing €50 billion in opportunities for EU exporters and €9 billion in growth for Mercosur countries by 2040. He also promised to step up import controls to ensure EU standards on imports of meat and other farm products are maintained.
Supporters of the deal say it will help deepen the EU’s economic cooperation with the global south, where China is already seeking an alliance following the disruption to the international trade order caused by Donald Trump.
This will also help the EU diversify away from China for critical minerals and rare earth elements that are vital for the automotive and technology sectors, as these elements are abundant in Mercosur countries.
Brazil accounts for approximately 20% of the world’s reserves of graphite, nickel, manganese and rare earths. But it also holds 94% of global reserves of niobium, a metal used in the aerospace industry, while Argentina is the third-largest producer of lithium, a material used in batteries for electric vehicles.
“The agreement is not just about the economy. Latin America is a region where there is intense competition for influence between Western countries and China. Not signing the EU-Mercosur free trade agreement risks bringing Latin American economies closer to Beijing’s orbit.”
“The conclusion of the agreement also signals that Europeans are serious about shifting their export markets away from the United States,” said Agathe Demarais, senior policy expert at the European Council on Foreign Relations, a leading think tank.
Farmers in the beef, poultry and grain industries claim these are collateral damage. “This will kill our agriculture in Poland,” Janusz Sampolski, a Polish farmer, told Agence France-Presse. “We will be dependent on supply chains from other countries,” he said, adding that this could threaten Poland’s food security “in case of threat of war.”
The Climate Action Network said the agreement was not just about tariffs and quotas, but would “increase deforestation” and “worse human rights conditions in some of the world’s most fragile ecosystems”, with incentives to grow timber for more beef, soy and paper production in areas prone to deforestation.
