Mercosur: the great pact stuck between the EU and South America | International

The ratification, once and for all, of the trade agreement between the European Union and Mercosur will be one of the elephants in the room of European leaders, during the summit held in Brussels this Monday and Tuesday between the leaders of the EU and the Community of Latin American and Caribbean States (Celac). The pact was reached in June 2019, but it has not yet been ratified and therefore has not entered into force. Nobody expects the situation to be resolved this week, although perhaps "decisive progress on outstanding issues" can be expected, says the European Commission's Trade spokeswoman, "paving the way for a political conclusion in the short term." The goal would be for everything to be ready before the end of this year, a limit set by the president of the European Commission, Ursula von der Leyen, on her trip to Latin America last June. "That would really be the game changer [un gran cambio en las reglas del juego] with the region. It would be the largest agreement ever signed by the EU. And it would allow the region to stabilize internally”, points out Javi López, MEP and co-president of the Euro-Latin American Parliamentary Assembly.

Four years ago the EU and Mercosur, an organization that brings together Brazil, Argentina, Uruguay and Paraguay, signed a trade agreement that, on paper, reached 780 million consumers. It took 20 years of negotiations and, however, as soon as it was signed in June 2019, resistance to its ratification began to be appreciated. They still follow. From Austria, the Netherlands, Ireland and, above all, France, there is resistance. Also in the European Parliament there was reluctance. They demanded more commitments against deforestation, the Paris agreements against climate change and they did not trust former Brazilian president Jair Bolsonaro. For this reason, the arrival of Luiz Inácio Lula da Silva to power in Brasilia last October and the Spanish Presidency of the Council of the EU since July 1, have been repeatedly pointed out as the opening of an opportunity that cannot be missed.

So to overcome resistance, Brussels sent the trade bloc an "additional instrument" in February to show the commitment of the Mercosur countries to environmental sustainability. "It is not about reopening the agreement," community sources point out. But this has not yet convinced the other side of the Atlantic, especially Brazil, which is in charge of the negotiations for the South American bloc. European sources point out, with some understanding, that this "additional instrument" is seen by the counterpart as an element of mistrust and a demand towards a political administration, that of Bolsonaro, which no longer exists. “The premise that must exist between strategic partners is mutual trust,” Lula declared during Von der Leyen's visit in June with her by her side.

Nor have they liked in Latin American countries (as in others in Southeast Asia and in what has come to be called the global south) the approval of directives that seek to bring European values ​​to trade policy and that these do not reduce the competitiveness of companies in the EU: the rule that vetoes the entry into the single market of products from deforested areas, the mechanism that charges a fee to products manufactured without community emission requirements or the directive that requires companies to monitor their value chain to mitigate adverse effects on the environment or human rights. In many areas of Mercosur, this battery of measures is considered unilateral impositions with a protectionist nature and a certain neocolonial aroma.

To counteract this view, Brussels has deployed intense diplomatic activity in the region with visits by the President of the Commission, Vice-Presidents and various commissioners in recent months. Now he awaits the response to the "additional instrument", which has not just arrived. Brazil seems to want concessions in public procurement, something that is not well received in the EU. It is not clear that the answer will arrive these days.

Even if it is not like that, Brussels is going to keep trying. The EU's High Representative for Foreign Policy, Josep Borrell, is no longer alone in preaching at the College of Commissioners about the importance of Latin America, something he lamented before the invasion of Ukraine began. "This agreement is of great geostrategic and economic importance, as it can help mitigate the effects of the Russian invasion in Ukraine, reinforce our mutual economic security and promote the ecological transition", highlights the Community Executive's Trade spokesperson. In other words, the war has made it clear that Europe has to win the diplomatic support of Latin America, that it does not have to take it for granted because there are historical ties between the two regions, and that the region has critical raw materials for the ecological transition. that would allow the EU to reduce its dependence on China in this field.

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