`Spain, Uruguay Try to Revive Stalled EU-Mercosur Trade Agreement - Olive Oil Times
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Spain, Uruguay Try to Revive Stalled EU-Mercosur Trade Agreement

By Daniel Dawson
Dec. 4, 2020 06:37 UTC

Diplomats on both sides of the Atlantic cel­e­brated after the his­toric European Union-Mercosur free trade deal was agreed in prin­ci­ple in June 2019. However, the deal has stalled in the ensu­ing 18 months.

If rat­i­fied, the agree­ment would cre­ate a sin­gle mar­ket of roughly 760 mil­lion peo­ple and elim­i­nate tar­iffs on 90 per­cent of goods traded between the two blocs, includ­ing olive oil and 99 per­cent of all other agri­cul­tural goods. The deal would also raise the import quo­tas on a num­ber of agri­cul­tural com­modi­ties.

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During the past year-and-a-half, the 7,000-page agree­ment has been slowly work­ing its way through the 27 European Union and four Mercosur cap­i­tals, where it has met sig­nif­i­cant skep­ti­cism from European farm­ers and envi­ron­men­tal­ists as well as from newly-elected South American gov­ern­ments.

The Mercosur is a cus­toms union com­posed of Argentina, Brazil, Paraguay and Uruguay.

Ongoing for­est fires through­out Brazil’s Amazon rain­for­est as well as in the Pantanal of Paraguay and Brazil have led to ques­tions about the lack of enforce­ment mech­a­nisms in the sus­tain­able devel­op­ment sec­tion of the agree­ment.

Earlier in the year, a spokesman for German Chancellor Angela Merkel said she had ​“sig­nif­i­cant doubts” about whether or not Germany would rat­ify the deal. The Dutch and Austrian par­lia­ments have also said they will not rat­ify the deal in its cur­rent state.

Senior offi­cials at the European Commission also have sig­naled that legally bind­ing envi­ron­men­tal com­mit­ments, espe­cially from Brazil, would be required in order for the agree­ment to be rat­i­fied.

“In its cur­rent form, we will not sub­mit it for rat­i­fi­ca­tion, and I believe that even if we do, we will not be suc­cess­ful,” Valdis Dombrovskis, the exec­u­tive vice-pres­i­dent of the European Commission, said.

He added that ​“durable solu­tions for the Amazon region” would be required for any agree­ment to pass through the E.U. mem­ber states before being handed off to the European Parliament for final approval.

Meanwhile, on the other side of the Atlantic Ocean, a new gov­ern­ment in Argentina has tepidly stated its sup­port of the deal, though President Alberto Férnandez has pulled out of other Mercosur nego­ti­a­tions and said he will pri­or­i­tize the country’s sig­nif­i­cant domes­tic issues over inter­na­tional trade.

“We changed our stance. We started say­ing no to the deal due to the impact it could have on our indus­trial sec­tor and because it wasn’t very ben­e­fi­cial on agri­cul­ture either,” Felipe Solá, Argentina’s for­eign min­is­ter, said dur­ing a video con­fer­ence last month. ​“When the E.U. decides what it wants to do with the deal, we’ll send it to Congress and have a debate around it.”

Brazilian President Jair Bolsonaro, who also came to power after the major­ity of the deal had been nego­ti­ated, is also report­edly not very keen on mov­ing for­ward with it.

He has been reproach­ful of European lead­ers crit­i­ciz­ing his han­dling of the wild­fires in the Amazon and has fre­quently dis­missed incul­pa­tory data col­lected by his own gov­ern­ment on the extent of those fires as inac­cu­rate and polit­i­cally moti­vated.

In spite of the sig­nif­i­cant oppo­si­tion fac­ing the deal, the gov­ern­ments in Spain and Uruguay are still hop­ing to find a res­o­lu­tion. The Spanish and Uruguayan min­is­ters of for­eign affairs met late last month to dis­cuss the next steps for the deal, includ­ing the poten­tial to rene­go­ti­ate parts of it.

“Both min­is­ters have agreed to high­light the extra­or­di­nary impor­tance of con­clud­ing the nego­ti­a­tion process as soon as pos­si­ble and declared that they are firmly com­mit­ted to sup­port­ing and moti­vat­ing, in their respec­tive regional blocs, the nego­ti­a­tions cur­rently under­way,” La Moncloa, the seat of the Spanish prime min­is­ter, said in a state­ment.

Uruguay holds the pres­i­dent pro-tem­pore of the Mercosur until the end of December, at which point Argentina takes over. As the days pass by, how­ever, it seems unlikely that the stum­bling block of what to do about the Amazon will be over­come before then.

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Francisco Bustillo, Uruguay’s min­is­ter of for­eign affairs, also has planned stops in Brussels and Paris on his European tour, where he hopes to con­vince the skep­ti­cal French prime min­is­ter, Emmanuel Macron, and European Commission diplo­mats into rat­i­fy­ing the deal.

One solu­tion could be hav­ing sep­a­rate trade and polit­i­cal agree­ments. This would allow debate over the enforce­ment mech­a­nisms in the sus­tain­able devel­op­ment sec­tion of the agree­ment to con­tinue while per­mit­ting the 15-year period for the ces­sa­tion of tar­iffs to begin.

“Mercosur and the European Union must con­cen­trate all efforts in round­ing up some of the issues still pend­ing, but given the sig­nif­i­cance of the accord and think­ing of the inter­na­tional cred­i­bil­ity of both blocks, it is press­ing to have it approved by mem­ber coun­tries,” Bustillo said. ​“However, that being said, Uruguay is most respect­ful of the domes­tic debates regard­ing the deal, but again time is press­ing.”

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