Macron says free-trade deal with Mercosur bloc is unfair for local farmers

French President Emmanuel Macron has criticised attempts to conclude a European Union free-trade deal with four South American countries, saying the accord would put the bloc’s companies and agricultural workers at a disadvantage.

The EU and the Mercosur nations — Argentina, Brazil, Paraguay and Uruguay — have been in talks to clinch an accord for more than two decades. An agreement was announced in 2019 but never implemented amid new EU environmental demands.

On a panel discussion with Bloomberg’s Stephanie Flanders at the Berlin Global Dialogue, Macron said that the current iteration of the free-trade agreement wasn’t fair. France is one of the few countries resisting the accord in its current form. 

“You cannot impose a bunch of regulation to your industries and your farmers — that they are digesting by the way because it’s not yet completed — and at the same time open to economies totally dis-aligned with this regulation,” Macron said on Wednesday. 

German Chancellor Olaf Scholz made a fresh appeal earlier on Wednesday — after a meeting with Macron in Berlin — for a swift conclusion to the talks. 

“The Mercosur agreement is groundbreaking for diversifying and strengthening the resilience of our economy,” Scholz said in a speech at an industry lobby conference, adding that it “should now be concluded quickly.” 

Scholz reiterated his goal of splitting trade negotiations into an EU-exclusive part and a second strand in which member states need to ratify the deal. That would allow certain aspects of the agreement to enter into force without the approval of national parliaments. 

Macron said that he could be in favour of such an arrangement. 

The Mercosur pact would create an integrated market of 780 million consumers, making it one of the world’s biggest free-trade deals.

It would also pull the two regions closer amid a broader global competition for influence in which China and Russia have sought to make inroads in resource-rich nations across the Americas. 

In his speech, Macron warned that the EU was at risk of being eclipsed by the US and China, which were investing more in their industries and were both registering greater economic output. He warned that the European model has changed and “needs to be reset.” 

“I’m totally in favour of trade, I think we live in an open world, it provided a lot of growth during decades in our economy,” he said. “Both the US and China, they do protect their market, they do subsidise their economy, they do invest much more than we do both public and private innovation — so we have to adapt ourselves.”