BRUSSELS — Ursula von der Leyen, the President of the European Commission, arrived in Uruguay on Thursday to advance the long-awaited negotiations aimed at finalizing a trade agreement between the European Union and the South American Mercosur trade bloc. This agreement has the potential to establish a trans-Atlantic market consisting of approximately 700 million individuals.
“The EU-Mercosur agreement is within reach. Let’s collaborate to make it happen,” von der Leyen stated Thursday, while addressing concerns raised by several EU member states, including France, as well as ongoing protests by farmers across Europe.
French President Emmanuel Macron has openly criticized the proposal, labeling it “unacceptable” due to the potential impact on France’s influential agricultural sector. Should the agreement move forward with Brazil, Argentina, Paraguay, Uruguay, and Bolivia, European farmers may find themselves competing against South American exports in beef, poultry, and sugar.
“Our agricultural independence will be our top priority,” Macron emphasized on Thursday.
Given that the EU Commission handles trade negotiations for all 27 member nations, von der Leyen could potentially strike a provisional deal at the upcoming Mercosur summit this weekend. However, the lack of consensus among member states could prevent the agreement from being formalized.
A preliminary draft of the deal was made public in 2019, but discussions have been stalled due to disagreements over environmental, economic, and political concerns. If issues are resolved, the EU-Mercosur agreement could cover an economic area that comprises nearly a quarter of the world’s GDP. The deal primarily focuses on reducing tariffs and trade restrictions, thereby facilitating exports for businesses on both sides.
Germany, notably home to a significant automotive industry, is a strong advocate for the deal, as it would simplify and lower costs for brands like Volkswagen, Audi, and BMW in their pursuit of the Latin American market.
Von der Leyen’s visit indicates that technical differences between the EU and the Mercosur bloc may have been addressed, paving the way for political leaders to make the necessary compromises to finalize the agreement, as noted by Commission spokesperson Olof Gill.
In response to these negotiations, a substantial protest movement involving European farmers emerged last year, and on Thursday, Belgian farmers joined the chorus of opposition by blocking border crossings. They argue that allowing Mercosur producers access to the EU market would lead to an influx of products exempt from the strict environmental and animal welfare regulations that EU producers are obligated to follow, thus creating an uneven playing field. Moreover, they point out that South American producers enjoy advantages from lower labor costs and expansive farms.
If a deal is reached, the next step would require the Commission to translate it into legal documentation. At this stage, it will become clear whether parts or the entirety of the agreement require unanimous approval from EU member states or if a special majority is adequate for finalization.
