Report: Mercosur free trade agreement has failed for the time being
It would have been the largest free trade zone in the world if the EU and major South American countries had reached an agreement. However, according to a report, the planned free trade agreement will not come about. 720 million people were supposed to benefit from it.
The Mercosur trade agreement is said to have failed for the time being. As the digital media company Table Media reports, citing negotiating circles, the EU Commission no longer sees any chance of an agreement being announced at the Mercosur summit on December 7 in Brazil. However, it is not clear from the report whether the talks will be broken off or whether a free trade agreement could be reached at a later date.
Commission President Ursula von der Leyen actually wanted to sign the agreement at a meeting with the Mercosur Group in Rio de Janeiro on Thursday. However, the agreement between the EU and Brazil, Argentina, Paraguay and Uruguay, which has been fully negotiated since 2019, failed due to resistance from Argentina as well as a lack of support from France. The Argentinian government, which will be replaced in a few days, had signaled that it was not prepared to reach a deal.
On Saturday, French President Emmanuel Macron signalled his rejection of the agreement at the COP28 climate conference: "I cannot ask our farmers, our industrialists in France and everywhere else in Europe to make an effort to decarbonize while I suddenly abolish all tariffs to import goods that are not subject to these rules." With regard to adjustments made in the meantime, he said: "A few sentences were added at the beginning and end of the text to please France - but that doesn't work."
Lula in Berlin for talks
Over the weekend, the negotiating team led by EU Trade Commissioner Valdis Dombrovskis tried to save the agreement. As was reported in Brussels, "the negotiators were sitting on packed suitcases". Brazil's President Luiz Inácio Lula da Silva, who had helped negotiate the agreement himself, flew directly from the climate conference to the German-Brazilian intergovernmental consultations in Berlin. Brazil currently holds the presidency of the Mercosur Group. Chancellor Olaf Scholz wanted to try to make an agreement possible during the talks.
It was also expected that Commission President Ursula von der Leyen would try to change Macron's mind. In the end, all efforts were obviously in vain. On Monday morning, the EU negotiators announced that there was no more hope: "There will be no declaration in Rio de Janeiro."
Mercosur and the EU negotiated the trade agreement intensively from 2016 to June 2019. The political agreement covers the areas of customs duties, rules of origin, the elimination of technical barriers to trade, services, public procurement, intellectual property, sustainability and a chapter on SMEs. With the agreement, the EU and South America wanted to create the largest trade zone in the world, with more than 720 million people. The EU plus Brazil, Argentina, Uruguay and Paraguay would have covered almost 20 percent of the global economy and more than 31 percent of global goods exports.
Read also:
- Despite Brazil's President Luiz Inácio Lula da Silva's efforts to save the Mercosur free trade agreement during his talks in Berlin, the EU negotiators announced on Monday that there was no longer any hope for an agreement at the Mercosur summit on December 7.
- German Chancellor Olaf Scholz, who wanted to make an agreement possible during the talks with Lula, expressed disappointment with the situation. The planned free trade agreement between the EU and major South American countries like Argentina, Brazil, Paraguay, and Uruguay has failed due to resistance from Argentina and a lack of support from France, as stated by the report.
- According to Commission President Ursula von der Leyen, France's President Emmanuel Macron rejected the agreement at the COP28 climate conference, stating that he could not ask European farmers and industrialists to make efforts to decarbonize while suddenly abolishing tariffs to import goods that are not subject to decarbonization rules.
- The failure of the Mercosur free trade agreement, which would have been the largest trade zone in the world, is a significant setback for trade relations between the EU and South America. With the agreement, the parties aimed to cover almost 20% of the global economy and more than 31% of global goods exports, benefiting 720 million people.
Source: www.ntv.de
