The European Union once again takes time with Mercosur 25 years later. Faced with the risk that France’s refusal and Italy’s misgivings will forever destroy Brazil, Uruguay and Paraguay, negotiated for a quarter of a century, the Community Executive has proposed to the American countries to delay the signing, scheduled for this weekend, at the beginning of January. Without Paris and without Rome, which has expressed its last-minute doubts this week, the math doesn’t work out. The leadership of the community institutions seems to have given up on the Frenchman Emmanuel Macron, but believes that, with a little work and some compensation, he could get the Italian Prime Minister, Giorgia Meloni, on board.
The Italian needs time to overcome internal resistance. He proclaimed it in the Italian Senate on the day when he said that the agreement was not yet mature. Farmers make up part of his electoral base and he fights with his government partner and electoral rival Mateo Salvini, the leader of the League. Hence, the Italian prime minister is resisting the pressures of the large transalpine employers’ association, Confindustria, very supportive of the trade agreement with Mercosur, which if it comes into force would create a potential market with more than 700 million people and 31 countries on both sides of the Atlantic.
For Meloni, giving his approval this Thursday, in which, again, with the Latin American bloc was impossible. He has said this to the president of Brazil himself, Lula da Silva, in a telephone conversation. “The Italian Government is willing to sign [el acuerdo] as soon as the necessary answers are provided to farmers, which depend on the decisions of the European Commission and can be realized quickly,” stated a note from the office of the Presidency of the Italian Government.
In order for the agreement to go ahead, Meloni has been increasing the price of his yes. And he has been achieving things. On Wednesday night, negotiators from the EU Council and the European Parliament approved new safeguards for farmers and for European products. A safety net designed by the European Commission that includes a mechanism to suspend the tariff advantages of products from Mercosur countries (Argentina, Brazil, Paraguay and Uruguay) that arrive in Europe in the event that “serious distortions” are detected for certain European sectors considered especially sensitive, such as beef, poultry or sugar.
These new guarantees do not require the approval of the Mercosur countries; they are compensation mechanisms for the affected sectors that can be activated relatively easily if these distortions are observed. However, they add to the long list of environmental, human rights and climate safeguards that are included in the trade agreement that the president of the European Commission, Ursula von der Leyen, agreed to a year ago, when France was in the middle of one of its recurring political crises (the one that cost Michel Barnier the position of prime minister).
“Overcoming our dependencies is done by diversifying trade agreements,” President Von der Leyen warned this Thursday, upon her arrival at the summit in Brussels. She, along with the president of the European Council, António Costa, and the heads of government of Spain, Pedro Sánchez, and Germany, Friedrich Merz, lead the group of supporters of the agreement. “Mercosur plays a central role in our trade agreements. It is of enormous importance that we have the green light,” claimed the German.
These phrases contain a good part of the strategy that the EU says it wants to implement to counteract the protectionist turn that Donald Trump has given to the White House and the multiple dependencies it has on China. Along these lines, in recent months, for example, an agreement has been reached with Indonesia or talks with India have accelerated. But the real touchstone, the one that would turn grandiose statements into ambitious deeds, is the ratification of the trade pact with Mercosur, as Von der Leyen says with words and Macron denies with deeds.
The news has upset the organization that brings together European employers’ associations. Barely an hour after the decision was known, BusinessEurope criticized it: “Postponing the signing of this historic agreement is bad news for companies. BusinessEurope considers that the benefits offered by the agreement are unequivocal. The agreement is a central element of the EU’s diversification agenda, crucial to driving a more competitive and resilient economy.”
