Macron open to new EU-Mercosur deal

During a three-day official visit to Brazil, French President Emmanuel Macron floated the idea of a new EU-Mercosur deal that could go beyond just trade, while critics and supporters await the finer details.

“Let’s do away with the Mercosur of 20 years ago”, declared French President Emmanuel Macron on Wednesday (27 March) from Sao Paulo, Brazil, adding “Let’s build a new agreement”.

These comments follow remarks from Foreign Minister Stéphane Séjourné, who, in January from Buenos Aires (Argentina), was clear that he was not “closing the door” on “something other” than a trade agreement.

The world’s largest free trade agreement has been on the negotiating table for 25 years, seeking to unite more than 780 million people and €120 billion worth of goods and services a year.

Like a few other EU member states, France is still not ready to sign and is calling for the inclusion of reciprocity clauses on ecological and social standards, known as “mirror clauses.”

Macron in Brazil to relaunch relationship, avoids thorny issue of Mercosur deal

War in Ukraine, attractiveness of investment and exchange of tips to decarbonise societies will feature on the agenda of Macron’s talks with Lula during his Brazil trip from Tuesday to Thursday (26-28 March), in an attempt to rekindle the relationship.

25 years of stalemate

In 2019, EU and Mercosur negotiators reached a political agreement just before France took the lead in a rebellion. Hope was revived with the election of Luiz Inácio “Lula” da Silva as Brazil’s new president at the end of 2022.

But two years later, the agreement has still not been concluded despite the European Commission, in charge of the negotiations, trying to find compromises

Don’t panic—”We still have time,” the Brazilian Finance Minister, Fernando Haddad, declared at the event in Sao Paulo.

“We are going to continue our efforts to sign this agreement with the EU. I have to tell you that it now looks much more promising than before”, Lula added.

EU-Mercosur unlikely to be finalised before the EU elections

It is highly unlikely that the hotly-contested EU-Mercosur free trade agreement will be concluded before the EU elections in June, French and German MPs familiar with the matter told Euractiv France.

A new what?

According to Macron, a new agreement would consist of “a new generation agreement with mirror clauses,” which would facilitate access to the European market for South American companies and be “more demanding on both sides with our farmers.

This is “interesting, because it differs from the comments made by the former Minister for Foreign Trade, Olivier Becht, last June, that the agreement should ‘obviously be concluded'”, Maxime Combes, an economist and leader of the opposition to the agreement in France, told Euractiv.

But not everyone is convinced on the substance.

“We are disappointed to read that [Macron’s proposal] could be limited to a few mirror clauses that we know are ineffective”, the economist added.

In his view, “the EU and Mercosur should consider a cooperation agreement on the issues of the 21st century (climate, deforestation, inequalities, education, green technologies, etc.)”.

Brazil, Spain 'ready' to sign EU-Mercosur trade deal despite France’s opposition

Brazil’s President Luiz Inacio Lula da Silva reaffirmed his readiness to seal a long-stalled trade deal between the EU and the Mercosur bloc during a meeting with Spain’s Prime Minister Pedro Sanchez in Brasilia on Wednesday (6 March). 

Need for clarification

To move towards “something else”, “we’d have to know what we’re actually talking about first. This could mean anything and nothing,” a European diplomat from a member state opposed to the agreement told Euractiv.

For those in favour of the agreement, as it stands, it is challenging to take a position. “We don’t have any concrete proposals [from France]”, another European diplomat told Euractiv.

They added that it is “difficult to comment on French statements when it is France that opposes the Mercosur agreement….”

“As such, France’s ‘no’ has always been a ‘no’ to the agreement ‘as it stands’ and not a definitive ‘no’,” says Mathilde Duprès, co-director of the Veblen Institute, a French public policy research association and a leading figure in the opposition to the deal.

With these manoeuvres, “[Emmanuel] Macron is trying to stall at least until the European elections”, she said to Euractiv.

After the EU elections

The atmosphere could change after the elections, but for the time being, negotiations are continuing in Brussels.

“The ‘EU-Mercosur’ teams continue to be in contact at a technical level to progress on the outstanding issues”, a European Commission spokesperson told Euractiv.

The two presidents also clarified that discussions were taking place at the level of EU and Mercosur negotiators, not between France and Brazil. “I don’t have to talk to Macron because this is not a bilateral agreement”, Lula said as the French president looked on.

For EU negotiators, the plan is “to travel to the region, but no dates are confirmed yet”, an EU Commission spokesperson added.

Macron may ignore the French Parliament if CETA is rejected

With the Senate having just rejected the trade agreement with Canada (CETA) and a new rejection looming in the National Assembly just before the European elections, France could ignore this decision. The opposition is denouncing this as an anti-democratic move.

[Edited by Alice Taylor]

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