The European Union and Latin American bloc of countries Mercosur finalized a free trade deal today, but a fierce battle is looming within the EU to ratify the deal, as member states – led by France – have said they will not approve it.

“This is a victory for Europe“, said European Commission President Ursula von der Leyen at a press conference in Montevideo.

“We have concluded negotiations on the EU-Mercosur agreement. This is the beginning of a new period. Now I look forward to discussing it with European countries“, she added at a joint press conference she gave with the presidents of Argentina, Brazil, Paraguay and Uruguay – members of Mercosur – who announced the agreement reached after 25 years of talks.

“This deal will work for people and business. More jobs. More options. Common prosperityUrsula von der Leyen wrote to X from Montevideo where she has been since yesterday, following a trip announced at the last minute.

“This deal is a win for Europe, with 30,000 small European companies already export to the Mercosur countries. Many more will follow. The EU-Mercosur agreement reflects our values ​​and commitments to climate action. Health and food standards in the EU remain untouched“, adds von der Leyen to “X”.

Following the signing of the EU-Mercosur Partnership Agreement, the President of the Commission announced that it is a “win-win deal”, which will bring significant benefits to consumers and businesses, from both sides. We focus on fairness and mutual benefit, he said. She reassured the agricultural sector that their concerns have been “heard” and action has been taken. “This agreement includes strong safeguards to protect your livelihood. EU-Mercosur is the biggest agreement ever to protect EU food and drink products. More than 350 EU products are now protected by a geographical indication“, emphasized von der Leyen and added: “Mercosur exporters will have to strictly comply with European standards to access the EU market. This is the reality of a deal that will save EU companies €4 billion a year in export duties».

France, Austria, Poland have expressly opposed it

It is worth noting that the EU-Mercosur agreement should receive the green light from the Council of the EU (member states) and the European Parliament. A qualified majority is required for Council approval. However, France, Austria and Poland have expressly opposed it with this agreement, while Italy could also join this front, according to the recent statements of the Minister of Agriculture of Italy, Francesco Lollobrigida. Four countries that account for 35% of the EU population form an exclusionary minority.

Negotiations for the EU-Mercosur free trade agreement was launched on 28 June 1999. After the talks were suspended, negotiations resumed in 2010. The protracted negotiations gained new momentum in 2016 and the EU and Mercosur concluded negotiations in 2019. The political agreement reached in June 2019 was never ratified due to the reluctance of many countries, including France.

The reaction of Paris

She was immediate reaction of Paris with Acting Foreign Trade Minister Sophie Primas – after the fall of the French government – saying that the deal “it is binding only on the Commission».

“Today clearly this is not the end of the story for this agreement. What is happening in Montevideo is not the signing of an agreement, but simply the political completion of a negotiation. This only binds the Commission, not the Member States“, said the minister.

Kaya Kalas: Today we sealed a historic agreement

“Today we sealed a historic agreement that creates the largest free trade area in the world”said the High Representative of the Union for Foreign Policy and Security Policy and Vice-President of the European Commission, Kaya Kalas after the conclusion of the negotiations on the agreement.

“At a time when we need positive news”emphasized Ms. Kalas, “This agreement is an important development between two long-standing partners: For Europeans, the agreement opens up a huge area of ​​free trade, ensuring among other things access to critical raw materials, while reducing the risk of being replaced in our absence by our competitors. The deal creates a market of over 700 million people and saves Europe billions in tariffs. It will bring a lot more jobs and opportunities for both sides.”

“This is what good foreign policy means. Today is a good day for the EU and our partners in Latin America”he said.

Maros Sefcovic: This landmark deal opens up new export opportunities for EU companies

“This landmark agreement opens up new export opportunities for EU companies, including SMEs and agri-food exporters, while saving more than €4 billion in customs duties annually”said the Commissioner for Trade and Economic Security, Maros Sefcovic, and added: “The agreement can also strengthen our economic security, in particular by developing resilient value chains in strategic sectors such as raw materials, and contribute to our shared, ambitious commitments to sustainability. More generally, rules-based partnerships with like-minded countries are geopolitically and economically necessary. That’s why I’m proud that the EU’s trade policy continues to deliver.”

“The deal comes at a critical time for both sides”

“The agreement comes at a critical time for both sides as it offers opportunities for significant mutual benefits through enhanced geopolitical and economic cooperation, as well as cooperation on sustainability and security.”is noted in a relevant announcement of the European Commission. And specifically, as emphasized:

* It will strengthen strategic trade and political ties between trusted like-minded partners.

* It will support economic growth, boost competitiveness and strengthen resilience on both sides, opening up trade and investment opportunities and ensuring sustainable access to and sustainable processing of raw materials.

* It represents a very important milestone in the fight against climate change with strong, concrete and measurable commitments to end deforestation.

* Takes into account the interests of all Europeans, including the EU’s extremely important agricultural sector.

* It will help increase EU agri-food exports while protecting sensitive sectors.

It is underlined that “the agreement respects EU standards for animal health and food safety, preventing the entry of unsafe products into the EU market”.

“Boosting EU and Mercosur competitiveness and economic security”

In addition, in the same announcement, it is underlined that this “landmark agreement”:

* It will protect and diversify supply chains.

* It will create new opportunities for all kinds of businesses by removing often prohibitive tariffs on EU exports to Mercosur.

* It will save 4 billion in tariffs. EUR for EU businesses annually.

* It will attract commercial interest in strategic zero net emission industrial sectors such as renewable energy technologies and low carbon fuels.

* It will help small and medium enterprises to increase their exports by reducing red tape.

* It will ensure an efficient, reliable and sustainable flow of raw materials, which is critical to the global green transition.

“Commitment to Sustainability Strengthens”

With this agreement, “EU-Mercosur sustainability commitments are strengthened” as “the Paris Agreement becomes an essential element of the EU-Mercosur relationship”, “concrete commitments to halt deforestation” and “clear and enforceable commitments to sustainable development, which cover, inter alia, labor rights and the sustainable management and protection of forests” and “civil society organizations take an active role in overseeing the implementation of the agreement, including their concerns about human rights or the environment.”

In addition, “through EU support of 1.8 billion euros will facilitate a fair green and digital transition in the Mercosur countries, in the framework of the Global Gateway initiative”.

Next steps

The proposed EU-Mercosur agreement consists of a “policy and cooperation pillar and a trade pillar,” the European Commission said in a statement. The conclusion of the negotiations is the first step in the process of concluding the agreement and, after the final legal processing by both sides, the text will be translated into all the official languages ​​of the EU and then submitted to the Council and the European Parliament.