For 25 years, Mercosur and the European Union (EU) have sought to close a deal, which could end between this Thursday (5) and Friday (6), during the Summit of Heads of State of the South American bloc, in Montevideo.
Signs of understanding between the two sides gained strength this Wednesday (4), with, according to sources from three countries interviewed by CNN.
Slovak diplomat Maros Sefcovic, who took over as EU Trade Commissioner a few days ago, is also part of the delegation on the way to Montevideo.
In that time, a lot has happened and, recently, France became .
The negotiations officially began in June 1999, during a summit in Rio de Janeiro, but their origins date back to an even older geopolitical scenario.
Retired professor and diplomat Paulo Roberto de Almeida points out that the idea of an agreement between the two blocs arose when the Europeans noticed the United States’ initiative to create the Free Trade Area of the Americas (FTAA), in 1994, under the government of Democrat Bill Clinton.
Faced with this proposal, the EU sought to strengthen its trade relations with Latin America, aiming to consolidate its presence on the continent.
However, the process suffered interruptions after the failure of the FTAA in 2005.
Almeida also highlights that the opposition of South American leaders, such as President Luiz Inácio Lula da Silva (PT) himself — who was in his first term —, Argentine Néstor Kirchner and Venezuelan Hugo Chávez, who rejected the FTAA project, contributed to European lack of interest at that time.
Furthermore, protectionist pressures, especially from countries like France, made it difficult for negotiations to move forward, which remained stagnant until 2010.
The significant resumption of conversations occurred after 2016, when the international scenario changed with the .
The Republican adopted a protectionist stance and weakened the multilateral trading system, imposing tariffs against several partners, including the EU.
“The Europeans, pressed between the American hammer and the Chinese anvil, decided to relaunch the agreement with Mercosur: [um tratado de associação] was completed quickly in 2019, as there was [os ex-presidentes] Jair Bolsonaro, in Brazil, and Mauricio Macri, in Argentina; but it was not ratified, precisely due to pressure from the same European protectionists”, said Almeida.
Despite progress, ratification faces obstacles, especially due to environmental issues and resistance from European protectionist sectors.
Currently, the EU is interested in dividing the agreement into two parts: a political-cooperative part, with diplomatic understandings, and a commercial part, under the responsibility of the European Commission, which does not require unanimity among members to enter into force.
The European Parliament, however, needs to ratify the general agreement.
Welber Barral, partner at BMJ Consultoria, recalls that opposition to the agreement with Mercosur comes mainly from the most agricultural countries in Europe, a group that, in addition to France — whose entrepreneurs recently —, includes Ireland.
“The French are the most vocal, but several agricultural groups from several European countries make their point. On the other side, Spain, Sweden and Germany have been those that have most supported the agreement so far”, he pointed out.
Even so, the expert remembers that the decision is not just made by countries that are against the treaty, but by the European Commission — made up of all the countries in the bloc —, which needs 55% of the votes and then pass a majority of the European Parliament.
Complexities
The insistence on the debate came from the complementarity that the economies of these blocs have to offer each other.
Leonardo Trevisan, professor of international relations at ESPM, reinforces that while Mercosur has strong opportunities in agribusiness — mainly due to Brazil —, the EU has a more robust industry — led by Germany.
The scenario has changed, and so have the needs of these sectors. The agreement negotiations were born in a period in which globalization was seen as a potential engine of progress, so that countries dreamed of regional integration.
“The concept and term [globalização] weakened politically. Before, it was a synonym for modernization, advancement and the future. Today, it is clear that globalization, which promised so many gains, has accentuated contradictions, vulnerabilities to competition and market pressures”, points out Carolina Pavese, PhD in international relations from the London School of Economics.
France, Poland and Ireland consolidated their respective agribusinesses with the European market. What its farmers fear is that with Brazil’s entry into the game, their clientele will change sellers.
“The biggest problem is not Brazilian agriculture entering France, it is the size of Brazilian industry, which is more efficient, stealing the French market. Brazilian agribusiness threatens European agriculture”, says Trevisan.
In addition to Mercosur agribusiness seeking a market in Europe, EU industry is trying to carve out space in South America, especially Germany.
Suffering from the effects of a connected world, German factories have lost place to Chinese products, which are cheaper and more competitive.
And while several economies around the world weakened, protectionist discourses strengthened.
“Nationalism is sought as if globalization were the only one to blame for countries’ internal problems. Reducing its intensity is a solution presented to the problems, but this is not what happens in practice”, points out Pavese.
With the isolationist turn that has been taking shape with Trump’s return to the White House, the doctor in IR assesses that Europe is in a delicate situation between showing loyalty to the USA (its largest trading partner) and maintaining relations with China (a supplier of various basic products of everyday European life).
Thus, Trevisan emphasizes that the agreement “was afraid of Trump”.
“The agreement is consolidated in a world facing significant deglobalization. And in a deglobalized world, backward industries and advanced agribusiness combine their interests”, says the ESPM professor.
Expectations
of the free trade agreement, and it is .
“The agreement is reached because at the moment it is of interest to both sides, with exceptions. The signature is a lifeline for both sides, and a breather for what is possible to maintain in an era of globalization”, concludes Trevisan.
The vice president, Geraldo Alckmin, told CNN that the
In an interview with CNN Moneythe senator and former Minister of Agriculture, Tereza Cristina (PP-MS), expressed optimism about the possibility of finalizing the agreement, but warned that, if it does not materialize, .
