European Commission President Ursula von der Leyen is in Uruguay for the final stages in years-long negotiations to clinch a controversial trade deal between the EU and the South American Mercosur trade bloc that would create a transatlantic market of some 700 million people.
Speaking on Thursday from Montevideo, von de Leyen said: “The finish line of the EU-Mercosur agreement is in sight. Let’s work, let’s cross it,” sidestepping objections from some EU member states like France and protests by farmers across the bloc.
French President Emmanuel Macron, mindful of his country's vocal and politically powerful farming community, has described what was on the table as "unacceptable”.
If the deal with the South American bloc – comprising Brazil, Argentina, Paraguay, Uruguay and Bolivia – goes ahead, EU producers would have to compete with South American agricultural exports such as beef, poultry and sugar.
“We will continue to steadfastly defend our agricultural independence,” Macron said Thursday, in the midst of a political crisis in France that has seen the collapse of his government, formerly led by Michel Barnier.
Deal in sight
Because the EU Commission negotiates trade agreements for all 27 member states, von der Leyen could go ahead with a provisional deal this weekend at the Mercosur summit in Uruguay, only to see it flounder because one or more members states refuse to sign up to it.
A draft deal was announced in 2019, but disagreements over environmental, economic and political issues have delayed its final approval until now.
If the final differences are bridged, the EU-Mercosur deal would encompass an economic area covering almost a quarter of global GDP.
It would centre on reducing tariffs and trade barriers and make it easier for businesses on both sides to export goods.
Germany, with its huge car industry, is a big proponent of the deal since it would make it much easier and cheaper for Volkswagens, Audis and BMWs to be sold in Latin America.
Von der Leyen's trip also suggests that technical issues between the EU and the South American bloc have been settled and the road was open for “the top political level to make the final compromises to try to get a deal over the line,” said EU Commission spokesman Olof Gill.
Farmers' anger
A massive European farmers’ protest movement last year sent warning shots to negotiators and on Thursday, protests from Belgian farmers added their voice by blocking border crossings.
French and Belgian farmers believe Mercosur producers would be allowed to flood the market with produce than do not have to meet the strict EU environmental and animal protection standards they have to abide by, thus unfairly undercutting the market.
On top of that, they say South American producers benefit from lower labour costs and larger farms.
If von der Leyen clinches a deal, the commission would still have to pour it into legal text and only at that stage would it become clear if certain or all parts need to be approved by unanimity or whether a special majority among EU nations would suffice to make the deal final.
