Sunday, July 21, 2024

ECONOMY | 02-06-2023 13:34

France: EU-Mercosur trade deal still long way from being signed

Free-trade agreement is not close to being signed, French diplomatic source says.

The free-trade agreement between the European Union (EU) and Mercosur countries is not close to being signed, a French diplomatic source said Friday.

The source, speaking ahead of a trip by French Trade Minister Olivier Becht to Brazil, said that there is “still a lot of work to be done.”

The two blocs concluded an agreement in 2019 after two decades of complex negotiations, but the eventual deal was not signed because of concerns in Europe about the environmental policy of the then-Brazilian president Jair Bolsonaro.

The relationship has since improved with the arrival in power in January of veteran leftist leader Luiz Inácio Lula da Silva,but the EU maintains its demand to include respect for its environmental standards in the pact with the bloc made up of Brazil, Argentina, Paraguay and Uruguay.

"At the moment, we are not there yet. There is still a lot of work to be done with the Mercosur countries on this issue," said this diplomatic source during a conference call with journalists.

In April in Madrid, Lula and Spanish Prime Minister Pedro Sánchez – who take over the pro-tempore presidency of their respective regional blocs in July – expressed their desire to close the deal in 2023.

"The issue will come up" during Becht's trip to Brazil from Monday to Wednesday, the diplomatic source said, adding that he was not going to "negotiate."

The European Commission negotiates on behalf of the 27 EU countries.

Becht will meet Geraldo Alckmin, Brazil's vice-president and trade minister, as well as Maria Laura da Rocha, Brazil's secretary-general for foreign relations.

After a tense start to the year with the unpopular pension reform, France also fears the reaction of its farmers if a deal is reached in 2023, a European source said, stressing that some countries such as Spain want to make progress on the issue.

European producers – especially French farmers – fear that South American agricultural goods will saturate the European market, especially when phytosanitary rules for production are less demanding than in the EU.

Becht, who will also visit Chile on Wednesday and Thursday, seeks to "reinforce" France's strategic partnership with both South American countries and the place of small and medium-sized French companies, according to the diplomatic source.



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