EU Chief In Last-gasp Push To Close South America Trade Deal

Montevideo, (APP - UrduPoint / Pakistan Point News - 6th Dec, 2024) European Commission President Ursula von der Leyen said Thursday that a controversial free-trade deal between the EU and South America's Mercosur bloc was "in sight" but her hopes of sealing the pact at a summit this week appeared slim after a flurry of last-minute resistance.

Von der Leyen arrived in Uruguay on Thursday for a two-day summit of leaders from Brazil, Argentina, Uruguay and Paraguay, the four countries with which the European Union hopes to create the world's biggest free trade zone.

"The finish line of the EU-Mercosur agreement is in sight. Let's work, let's cross it," she wrote on X of the deal, which has been in the works for over 20 years.

But her plans appeared in jeopardy after Italian government sources said Thursday the "conditions are not in place" for Rome to sign the accord, potentially giving naysayers in Europe the power to block it.

The deal would allow the EU to export cars, machinery and pharmaceutical products more easily to South America.

In return, Brazil and its neighbors would be able to sell meat, sugar, rice, honey, soybeans and other products to Europe with fewer restrictions.

A large majority of EU member states, led by Von der Leyen's native Germany and Spain, are in favor of it.

But with Italy and Poland set against, and the Netherlands and Austria also expressing reservations, France appeared close to having the blocking minority of at least four countries representing 35 percent of the EU's population needed to stop the deal advancing.

- 'Unacceptable' -

Farmers in the EU fear the deal would see Europe flooded with cheap imports from countries where producers operate to less stringent environmental, sanitary and labor standards.

French President Emmanuel Macron on Thursday repeated a warning to Von der Leyen that the agreement was "unacceptable in its current state."

The treaty, under discussion since 1999, aims to eliminate most customs duties between the EU and Mercosur to create a vast market of more than 700 million consumers.

A political agreement was concluded in June 2019 but never ratified amid concerns over the impact of Brazilian farming on climate change, among other factors.

Sources familiar with the negotiations told AFP the new deal would include changes to "several chapters," including government contracts, services, intellectual property and the environment.

Von der Leyen is planning a joint news conference on Friday in Uruguay with the presidents of Brazil, Argentina, Paraguay and Uruguay, EU officials told AFP.

- 'The Commission decides' -

NGOs and left-wing activists believe that the creation of a vast free-trade zone will accelerate deforestation in the Amazon and worsen the climate crisis by increasing greenhouse gas emissions.

The push by the EU and Brazil particularly to get the deal done comes as Macron appears politically weakened after his government collapsed Wednesday in a no-confidence vote -- the first time a French government has been brought down by parliament in over 60 years.

Brazil's President Luiz Inacio Lula da Silva has shrugged off France's opposition, saying: "They no longer decide anything, it's the European Commission that decides."

But once a possible deal is signed with Mercosur countries, it will need to be ratified by at least 15 EU members representing 65 percent of the EU population, then by a majority in the European Parliament.

Ignacio Bartesaghi, a professor of international relations at the Catholic University of Uruguay, said it was important for Lula to "show some success in Mercosur" to fend off pressure from Argentina and Uruguay for Mercosur states to be allowed to cut bilateral trade deals outside the bloc.

Argentina's President Javier Milei is pushing for a free trade deal with the United States.