- Deal aims to offset U.S. tariffs, reduce reliance on China
- France opposes deal due to impact on domestic farmers
- Accord will still require European Parliament’s approval
- Safeguards include import controls, crisis fund for farmers
BRUSSELS, Jan 9 (Reuters) – EU ambassadors gave provisional approval on Friday to the signing of the bloc’s largest ever free trade accord with South American group Mercosur, over 25 years since negotiations began and after months of wrangling to secure key member states’ backing, according to three EU diplomats and sources.The European Commission, which concluded negotiations a year ago, and countries such as Germany and Spain argue it is a vital part of an EU push to unlock new markets to offset business lost from U.S. tariffs and to reduce reliance on China by securing access to critical minerals.
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Opponents led by France, the European Union’s largest agricultural producer, say the agreement will jack up imports of cheap food products, including beef, poultry and sugar, undercutting domestic farmers. Farmers have launched protests across the EU, blocking French and Belgian highways and marching in Poland on Friday.
Ambassadors from the EU’s 27 member states indicated their governments’ positions on Friday with at least 15 countries representing 65% of the bloc’s total population voting in favour, as required for approval, the EU sources and diplomats said. EU capitals have been given until 5 p.m. Brussels time (1600 GMT) to provide written confirmation of their votes.
This will clear the way for Commission President Ursula von der Leyen to sign the agreement with Mercosur partners – Argentina, Brazil, Paraguay and Uruguay – possibly as early as next week. The European Parliament will also need to approve the accord before it can enter force.
FRANCE SAYS THE BATTLE IS NOT OVER
The free trade agreement would be the European Union’s biggest in terms of tariff reduction, removing 4 billion euros ($4.66 billion) of duties on its exports. The Mercosur countries have high tariffs, such as 35% on car parts, 28% on dairy products and 27% on wines.
The EU and Mercosur will hope to expand evenly split goods trade worth 111 billion euros in 2024. EU exports are dominated by machinery, chemicals and transport equipment, and Mercosur’s are focused on agricultural products, minerals, pulp and paper.
To win over deal sceptics, the European Commission has put in place safeguards that can suspend imports of sensitive farm produce. It has strengthened import controls, notably regarding pesticide residues, established a crisis fund, accelerated support for farmers, and has pledged to cut import duties on fertilisers.The concessions were not enough to win over Poland or France, but Italy shifted from a ‘no’ in December to a ‘yes’ on Friday, according to one EU diplomat.
French Agriculture Minister Annie Genevard has said the battle was not over and has pledged to fight for a rejection by the EU assembly, where the vote could be tight. European environmental groups also oppose the accord, with Friends of the Earth calling it a “climate-wrecking” deal.
German Social Democrat Bernd Lange, the chair of parliament’s trade committee, expressed confidence that the deal would be passed, with a final vote most likely in April or May.
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Reporting by Philip Blenkinsop, additional reporting by Charlotte Van Campenhout and Alan Charlish
Editing by Gareth Jones and Toby Chopra
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