At the moment of greatest political weakness of Emmanuel Macron, the president of the European Commission, Ursula von der Leyentraveled to Montevideo this Thursday with the aim of closing the controversial free trade agreement between the European Union and Mercosur, a bloc formed by Brazil, Argentina, Uruguay and Paraguay. A pact championed by Spain and Germany, but which is strongly opposed by France, which denounces that it will harm European farmers and the objectives of sustainability and the fight against climate change.
“The finish line of the EU-Mercosur agreement is in sight. Let’s work, let’s cross it. We have the opportunity to create a market of 700 million people – the largest trade and investment partnership the world has ever seen. Both regions will benefit,” Von der Leyen wrote on her X social network account as soon as she landed in the region, on a trip that has been organized with the utmost secrecy. He is accompanied by the new Trade Commissioner, the Slovakian Maros Sefcovic.
The president meets this Thursday with the president of Montevideo, Luis Lacalle. On Friday he will participate in the Mercosur leaders’ summit (which will also include the Brazilian Luiz Inácio Lula da Silva and the Argentine Javier Milei), a forum in which a free trade agreement is expected to finally be closed, which is basically an exchange of Latin American beef for EU cars and machinery.
According to Brussels calculations, the pact It will save community companies 4 billion euros a year in tariffs. Furthermore, it guarantees the protection of 357 Geographical Indications of food and beverages of the EUof which 59 are Spanish. But in addition, Brussels highlights the geopolitical dimension of the agreement with Mercosur. It is about sending a powerful message of support for multilateralism and open, rules-based trade just as Donald Trump returns to the White House with his threat of general tariffs. Europeans also do not want to lose ground to China’s growing influence in the region.
For these reasons, the EU-Mercosur agreement has been one of the political priorities in Brussels Pedro Sanchez since he came to power, although Spanish farmers also reject it and denounce that it will harm sectors such as citrus. Sánchez wanted to conclude it during the Spanish presidency of the EU in the second half of 2023 to strengthen relations with Latin America, but he failed in his objective, especially due to opposition from France.
In recent weeks, President Macron has mobilized all his troops to overthrow the agreement with Mercosur. The Government of Paris needs to gather a blocking minority of at least 4 Member States which add up to 35% of the EU population. Other member states such as Austria and the Netherlands are also in the ‘no’. The last to join the French side was the Polish Prime Minister, Donald Tuskwhich on November 27 announced its opposition to the pact citing “concerns for Polish farmers and food security.”
However, these countries have not yet reached a sufficient blocking minority, which has allowed Von der Leyen to make a coup with his surprise trip to Uruguay. The key now lies with the Government of Giorgia Meloni in Italywho in recent weeks has shown doubts, but at the moment has not opted for ‘no’.
In reality, the pact with Mercosur, whose negotiations began in 2000, It was provisionally closed in June 2019but has since run aground again. To respond to the concerns of both parties, Brussels has negotiated in recent months an additional chapter on sustainability (which would address issues such as the fight against deforestation and climate change), but at the moment all the details are unknown. The next few hours will be decisive to know if the agreement with Mercosur is approved or finally shipwrecked.
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