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EU leaders at a Brussels summit decided on Thursday to postpone the signing of a trade deal with four Mercosur countries until January. That means that despite 25 years of negotiations, the sides are closer, yet they still have no agreement.
European Commission President Ursula von der Leyen on Friday said she is confident the delay will give negotiators the time to find compromise.
“We have reached out to our Mercosur partners and agreed to postpone slightly the signature,” von der Leyen said, calling the deal, “crucially important for Europe — economically, diplomatically, and geopolitically.”
What is the Mercosur deal and why is there resistance to it?
The free trade deal aims to increase trade between the South American and European economic blocs, but is viewed critically by some major EU countries.
Proponents of the agreement include Germany, Spain and Nordic countries. They argue it will increase exports suffering under US tariffs and reduce reliance on Beijing.
However, critics including France, Italy and Poland are wary of an influx of cheap commodities and its impact on European farmers.
Negotiations were also accompanied by large protests, primarily from European farmers.
“We are working to postpone the Mercosur summit, which will give us more weeks to try to provide the answers our farmers are demanding and the safeguards needed for our products,” Italian Prime Minister Giorgia Meloni said Friday.
“This will allow us to approve the Mercosur agreement when, as we have said, we have all the guarantees required by a sector that could otherwise be affected.”
Macron on Mercosur: ‘Much has been improved,’ but not ready to sign
French President Emmanuel Macron said he was not yet prepared to sign the deal with Brazil, Argentina, Uruguay and Paraguay, despite efforts to incorporate new safeguards for European farmers.
“Much has been improved,” Macron said, noting the safeguards had not been finalized or coordinated with the Latin American countries.
The safeguards would give the EU powers to temporarily reimpose tariffs or restrictions on certain agricultural products if it deemed them harmful to EU producers. Those include a sharp dip in prices or increase in overall import levels.
Macron said France demands work continue, “so that things are taken seriously, our agriculture is respected, and the food security of our citizens throughout Europe is guaranteed.”
Macron said it was too early to say if an extra month would suffice to iron out the deal, but hoped it would be the case.
European Commission President Ursula von der Leyen was scheduled to leave the EU summit and fly straight to Brazil for a signing ceremony with President Luiz Inacio Lula da Silva this Saturday. This now appears to be in doubt.
Meanwhile, farmers protested in Brussels on Thursday amid the summit, against both the planned trade deal and potential reforms to subsidies in the EU’s Common Agricultural Policy.
Edited by: Rana Taha