The Brief – Groundhog Mercosur

It’s been 25 years since the four Mercosur nations and the EU vowed to sign a free-trade agreement. Twenty-five years of political to-ing and fro-ing, now compounded with pro-environmental imperatives pushing negotiations to the brink of collapse.

In hindsight, the trade talks resemble ‘Groundhog Day’ – a 1993 US movie where Phil Connors, a disheartened weatherman wanting to give his life some radical revamp, gets stuck in a time loop, condemned to relive the same day repeatedly.

This differs little from the trajectory of the Mercosur negotiations, which has repeatedly seen the same arguments, blockages, advantages, and setbacks.

In 1999, the European Commission and Mercosur countries – Brazil, Argentina, Paraguay and Uruguay – began talks on what was hailed as one of the biggest trade agreements in history.

Covering 780 million people on both sides of the Atlantic and hundreds of thousands of tonnes of goods and services worth more than €120 billion annually, it would also see customs duties for EU companies lowered to the tune of €4 billion a year.

Of course, such an agreement cannot be signed in a heartbeat.

Negotiators met hundreds of times, and while there was some progress, the deal has been at a standstill for the past five years.

The first big hurdle came along in 2004 when it became clear that the scope of the products to be integrated into the deal was significantly more difficult to define than first expected.

Negotiations were postponed and then restarted in 2010. But two years of intense meetings and nine rounds of negotiations produced no tangible result, and things ground to a halt once again.

In 2015, negotiations restarted until 2019 when negotiators reached a deal after 40 rounds of talks. Observers began to wonder whether it was a sign the Groundhog Day curse was finally lifting.

“This agreement will have […] positive effects on the environment”, then-European Commission chief Jean-Claude Juncker boasted at the time. At the height of US President Donald Trump’s tenure, the deal showed that the EU “reject protectionism.”

France had supported the agreement but warned it would “remain vigilant,” and Macron insisted on adding specific references to the Paris Climate Agreement. He said there should also be mirror clauses in the trade deal to ensure that social and environmental regulatory expectations are the same on both sides.

That same year, environmental disasters of unprecedented scales hit the globe, and massive fires ravaged the Amazon Forest. The neo-liberal, far-right, climate-denying Brazilian President Jaïr Bolsonaro was seen by the EU as too slow to respond.

Eventually, Paris accused Bolsonaro of having “lied” about his real intentions on climate and biodiversity, and so the Mercosur deal was halted – again.

It was not until three years later, in 2022, when the socialist Lula became Brazil’s president, that hope of resuming the talks was revived. The EU thought Lula would be more inclined to act on climate change than his predecessor ever was.

In March 2023, chief negotiators met in Buenos Aires and gave themselves six months to hammer out a final deal. But if you think this was the end of it, think again.

Several EU countries said they could not sign the deal “as it stands”, while accusations of neo-colonialism started flying and meetings scheduled for June were cancelled.

Come December. German Chancellor Olaf Scholz said it was high time both sides showed “pragmatism” for a deal to be found.

Soon afterwards, a joint press release said that “the two parties hope to reach an agreement quickly”, but no clear schedule was given.

A few days ago, at the end of January, “technical” negotiations resumed between the South American and European authorities. According to the rumours, the aim was to conclude the trade agreement before the end of February.

Enter France again.

Keen to protect French farmers, Macron said: “We ask that the deal should not be signed in its current form.”

Macron was pugnacious in confirming that the EU Trade Commissioner Valdis Dombrovskis had cancelled a visit to Brazil just before the political agreement was due to be signed. Hours later, the Commission categorically denied France had played a role in the cancellation.

And with farmers’ protests sweeping across the EU in recent weeks, talks will likely be postponed again, which begs the question: Will the EU ever break away from its own Groundhog Day?

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The Roundup

France’s newly appointed prime minister Gabriel Attal unsurprisingly survived his first vote of no confidence on Monday, filed by all left-wing parties, with only 124 votes out of the required 289 – as both the far-right and conservatives announced ahead of time they would not support the motion.

Lobbyists from US tech giant Amazon should have their access badges to the European Parliament revoked “until the company’s management is willing to engage in genuine dialogue with the Parliament,” members of the Parliament’s employment committee have written in a letter to the institution’s president.

EU’s chief diplomat Josep Borrell confirmed on Monday he was heading for Ukraine as he reiterated calls for more aid for the war-torn country.

European farmers have been protesting for months, with demonstrations spreading around the continent, culminating in last week’s descent on Brussels, and while the movement is now changing gear, stakeholders warn more actions will be forthcoming.

A German government agreement will create state support mechanisms for up to 10 GW of newly-built gas power plants, opening the way for carbon capture in the energy sector and may delay the country’s 2035 plan for a fossil-free power system.

European solar panel manufacturers have warned they are “poised to shut down manufacturing lines” unless the EU takes emergency measures to save the sector, such as a buy-out of their inventories, which have piled up in recent years due to an influx of cheaper versions from China.

In a rare show of unity, business and environmental groups have published a joint letter calling on EU policymakers to back mandatory sorting of mixed household waste, saying this is the only way to meet EU recycling goals and prevent the incineration of recyclable paper, metals, and plastics

Look out for….

• European Parliament plenary session in Strasbourg, Monday-Thursday.
• Commission President Ursula von der Leyen receives Terry Reintke and Philippe Lamberts, co-chairs of Greens/EFA Group in European Parliament, on Tuesday.
• Informal meeting of ministers responsible for cohesion policy on Monday-Tuesday.

Views are the author’s

[Edited by Théo Bourgery-Gonse/Zoran Radosavljevic/Alice Taylor]