EU lawmaker: ‘Window of Opportunity’ for Mercosur trade agreement

Spanish Member of European Parliament Inma Rodríguez-Piñero called for a swift wrap-up of negotiations between the EU and the South-American trading bloc Mercosur following years of delay due to environmental concerns and agricultural interests.

The EU has been locked in negotiations for a free trade agreement between the two blocs for years before reaching a political agreement in 2019. However, no progress has been made due to a raft of concerns, especially from the French, who worry about its effect on farmers.

During a EURACTIV debate sponsored by the mechanical industry association VDMA, which has an interest in the ratification of the agreement with Mercosur due to the elimination of trade barriers for its industry, the Social Democrat Rodríguez-Piñero argued that signing the Mercosur agreement would be an important step to defend common interests and multilateral trade.

“Not signing it would send a very bad signal to the world,” she said. “The EU would lose its credibility and influence at this important moment.”

Paolo Garzotti, head of the Latin America unit at the EU Commission’s directorate-general for trade, concurred. “The most important thing is the geopolitical dimension in today’s circumstances,” he said, alluding to the geopolitical tensions that seem to be tearing the current model of multilateral trade apart.

While the EU is not as extreme as the US, which seems to follow a strategy of isolation against China, the EU Commission also wants to reduce its dependence on Beijing.

Especially in the field of raw materials, China has a dominant role. When EU Commission President Ursula von der Leyen first discussed the ‘Green Deal Industrial Plan’ at the World Economic Forum in mid-January, she mentioned the need to “diversify away from single suppliers.”

When she presented the communication on the plan on Wednesday (1 February), she said, “we need to restart a conversation regarding the Mercosur agreement.”

Mercosur encompasses the South American countries of Brazil, Paraguay, Uruguay, and Argentina, and there are raw materials are important for the transition towards a more climate-friendly industry. There are large lithium deposits in Argentina, for example.

The Commission’s Garzotti emphasised the deal’s importance for the green transition.

“We have the technologies, and they have the potential to help us on this,” he said.

However, environmental concerns are also related to liberalised trade with Mercosur countries.

French members of the European Parliament have expressed their concerns over the environmental impact of intensified trade, worrying about the deforestation of the amazon rainforest that is being devoured by the Brazilian agriculture sector.

“We really need commitments that will change things”, French Renew MEP and vice-chair of the trade committee of the European Parliament Marie-Pierre Vedrenne told a hearing with EU Trade Commissioner Valdis Dombrovkis in January.

French MEPs concerned over EU-Mercosur deal amid regional push

Over 20 years in the making, the EU-Mercosur deal is edging closer to implementation, with the region’s leaders, including Brazil’s freshly elected President Lula, pushing for swift ratification. However, French EU lawmakers reiterated concerns over environmental standards.

Spanish MEP Rodríguez-Piñero argued that this danger could be mitigated by including a strong chapter on sustainable development in the agreement.

“It is important that the sustainable development chapter establishes the commitment of the parties to effectively implement the Paris agreement on climate change and fight against deforestation,” she said.

According to her, there now is a “window of opportunity” after the election of the Brazilian president Lula who is more open to environmental arguments than his right-wing populist predecessor Bolsonaro.

Moreover, the Spanish government will take over the presidency of the Council of the EU in the second half of this year. Due to its historical and present links to the region, it is highly interested in getting the deal over the line.

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