EU‑Mercosur trade deal ignites European tensions

European Commission President Ursula von der Leyen announced on Friday, December 6, in Montevideo, the conclusion of the free trade agreement negotiations between the European Union and the Mercosur bloc, which includes Argentina, Brazil, Paraguay, Uruguay, and Bolivia.

Work on the free trade agreement between the European Union and the Mercosur countries has been ongoing for 20 years.

Poland, France, and Italy have expressed opposition to the agreement, while Germany supports it.

Ursula von der Leyen’s first major act in her second term as EU chief executive is inflaming a severe Franco-German rift and threatening to shake the foundations on which the European Union is built, writes the Politico portal.

The French, like the Poles, fear that the agreement will undermine the position of their farmers.

"For the Germans, that’s great news. Increasingly frantic about industrial decline, the Mercosur agreement is a prime opportunity to help find new growth markets for Germany’s ailing manufacturing champions," writes Politico.

The portal adds that the Paris-Berlin conflict is the last thing the European Union needs.

"The Paris-Berlin rift is so sensitive to the whole EU because negotiating trade deals is one of the most critical competences entrusted to the European Commission on behalf of all 27 EU countries. France’s repeated vetoes to the Mercosur deal are infuriating German leaders to such an extent that they are questioning the point of Brussels handling trade, and even suggest it might make more sense for Berlin to take back control of its own trade policy," writes Politico.

The agreement, according to the European Commission, addresses the concerns of European farmers. The Commission states that the agreement introduces restrictions on the import of beef, poultry, and sugar, and allows for the suspension of imports in the event of market disruptions.

The defence restrictions anticipate that the EU could receive up to 99,000 tonnes of beef annually from Mercosur countries, which accounts for 1.6% of the total consumption in the Union. That's not all. In addition, tariffs on beef will be reduced to 7.5%, but not eliminated. Restrictions also apply to poultry and sugar.

The agreement also provides a mechanism to suspend the import of agricultural products in case of disruptions in the European market. Exemptions from tariffs and quotas for agricultural products from Mercosur countries will come into effect gradually over seven years.