STORY: The European Union and South America’s Mercosur bloc struck an agreement for a free trade deal on Friday (Dec 6).
But they still face a potentially difficult battle for approval in Europe given French opposition.
European Commission president Ursula von der Leyen called the long-delayed deal a “political” necessity at a press conference in Uruguay.
“This agreement is a win for Europe. 60,000 companies are exporting today to Mercosur, 30,000 of them small and medium enterprises. They benefit from reduced tariffs, simpler customs procedures and preferential access to some critical raw materials. This will create huge business opportunities.”
The agreement faces strong opposition from both France and EU farmers.
French Trade Minister Sophie Primas pledged to resist its next stages and cited concerns over environmental and agricultural effects.
European farmers also fear the deal could lead to cheap imports of South American commodities, notably beef, that do not meet the EU’s green and food safety standards.
European green groups also broadly oppose the accord, with Friends of the Earth calling it “climate-wrecking.”
But a group of EU members including Germany and Spain see the deal as vital for the bloc.
They argue the EU needs to diversify its trade after the near-closure of the Russian market and concerns about reliance on China.
They see Mercosur as a market for EU cars, machinery and chemicals, and a potentially reliable source of critical minerals.
They also believe it has agricultural benefits as the deal offers greater access and lower tariffs for EU cheeses, ham and wine.
German Chancellor Olaf Scholz posted on X Friday the deal would, “create a free market, more growth and competitiveness for more than 700 million people.”
The trade agreement would require approval from 15 of the 27 EU members representing 65% of the EU population.
It also needs a simple majority in the European Parliament.
South American negotiators are optimistic the EU will eventually give its approval despite French opposition.