Photographer: Wiktor Dabkowski\/Bloomberg <\/p>\n
(Bloomberg) — Ursula von der Leyen was supposed to sign the European Union\u2019s largest free-trade agreement on Saturday, proving the bloc\u2019s standing as a geoeconomic force.<\/p>\n
Instead, the European Commission president will have to figure out a way to salvage the Mercosur pact by rallying last-minute support from countries including Italy that helped delay the deal \u2014 yet again \u2014 over concerns it would hurt domestic farming sectors.<\/p>\n
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Negotiations on the trade accord \u2014 with Argentina, Brazil, Uruguay and Paraguay \u2014 have been drawn out over 25 years, rankling the South American countries. Brazilian President Luiz Inacio Lula da Silva said earlier this week the time was now or never.<\/p>\n
In a letter to Lula Friday, von der Leyen and European Council President Antonio Costa regretted missing the Dec. 20 self-imposed deadline and said they\u2019re \u201cactively working\u201d to get the deal across the finish line, according to the document seen by Bloomberg.<\/p>\n
Officials say they will try again to sign the deal on Jan. 12, but there\u2019s no guarantee. <\/p>\n
The ongoing failure to ratify the accord is a blow for the EU, which wants to use the transatlantic agreement as evidence that it could be a global power. It especially wants to prove it can move outside the orbit of China and the US, which have increasingly antagonistic trade relationships with Europe. \u00a0 \u00a0 <\/p>\n
\u201cThis is Europe\u2019s independence moment,\u201d von der Leyen said earlier this week, ahead of a summit when EU leaders would tackle funding options for Ukraine as well as Mercosur.<\/p>\n
Photographer: Simon Wohlfahrt\/Bloomberg <\/p>\n
The EU views China as both an economic competitor and a systemic rival and has been navigating an escalating trade confrontation that\u2019s seen both sides impose tariffs on the other\u2019s imports. Earlier this year, Beijing announced plans to tighten controls on its exports of rare earths and other critical materials, showing the EU how vulnerable its industries are.<\/p>\n
And this summer, the EU accepted what it saw as an unbalanced trade agreement with the US, agreeing to a 15% tariff on most of its exports while pledging to remove all duties on American industrial goods.<\/p>\n
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\u201cFailure to authorize the deal would hurt Mercosur more than the EU economically, but it would be a geopolitical setback for Brussels at a time of rising US and Chinese pressure.\u201d<\/p>\n
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\u2014Antonio Barroso. For the full note, click here<\/p>\n
The EU-Mercosur trade pact could help Europe escape its souring dynamics with the US and China. The pact would create an integrated market of 780 million consumers, gradually erase tariffs on goods including cars and give Europe easier access to Mercosur\u2019s vast agricultural industry and resources.<\/p>\n
Critically, that would give the EU economic ties and supply chains beyond the US and China. The deal would also show the region that Europe can offer a credible economic alternative to the two superpowers.<\/p>\n
Failure to secure the Mercosur partnership \u201cwould certainly be a blunder of epic proportions for Europe\u2019s ambitions to position itself as a relevant player on the global economic scene,\u201d said Agathe Demarais, senior policy fellow at the European Council on Foreign Relations, a think tank.<\/p>\n
Source: Source: Bloomberg <\/p>\n
For now, the EU has been unable to find the majority support needed for passage, mostly due to deep-seated anxieties that the new trade dynamics would merely undercut Europe\u2019s agriculture sector. During a summit Thursday in Brussels, EU leaders faced down thousands of protesting farmers setting tires ablaze and dumping potatoes in the streets.<\/p>\n
After the summit ended, however, the leaders expressed optimism that they could still move forward in January.<\/p>\n
Another three-week wait is \u201ctolerable\u201d after 25 years of negotiations, von der Leyen told reporters. \u201cI\u2019m very confident we will bring it home.\u201d <\/p>\n
The deal\u2019s fate may come down to Italy. Italian Prime Minister Giorgia Meloni has said that she needs more time to win domestic approval.<\/p>\n
\u201cOther developing economies are watching and would take note of how hard it is to get anything over the line with the EU,\u201d Demarais said.<\/p>\n
Photographer: Alessia Pierdomenico\/Bloomberg <\/p>\n
For Berlin and many others, however, the Italian leader was trying to extract the maximum price for its kingmaker role, seeking more concessions for its agricultural sector.<\/p>\n
Lula said Meloni had told him she just needed a few more days. But while some expect that Italy will ultimately give its blessing, given the potential benefits for its exporters, others have been more downbeat.<\/p>\n
\u201cIf there\u2019s no signature on Dec. 20, then the agreement is dead, and this will have consequences for the EU in future trade relations with countries around the world,\u201d Bernd Lange, chair of the European Parliament\u2019s trade committee, said this past week.<\/p>\n
In an attempt to get the deal through this week, the European Parliament and EU capitals agreed to add fresh protections for European farmers that would shield them from sudden price or import swings.<\/p>\n
It didn\u2019t work. And if things keep lingering without a conclusion, the two blocs may shift their attention elsewhere.<\/p>\n
\u201cWithout political will and courage from its leaders, it will not be possible to conclude a negotiation that has dragged on for 26 years,\u201d Lula told his Mercosur counterparts at the bloc\u2019s semi-annual summit Saturday. \u201cMeanwhile, Mercosur will continue working with other partners.\u201d<\/p>\n
The South American bloc wants to conclude an agreement with the United Arab Emirates, and is exploring possible partnerships with Canada, the UK and Japan. The EU, for its part, is trying to close a deal with India, which is also almost two decades in the making.<\/p>\n
\u201cIf the EU wants to remain credible in global trade policy, decisions must be made now,\u201d German Chancellor Friedrich Merz said on his way into the summit in Brussels.<\/p>\n
–With assistance from Michael Nienaber and Donato Paolo Mancini.<\/p>\n
(Updates with EU letter in fourth paragraph, Lula comments in 23rd.)<\/p>\n
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\u00a92025 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"Photographer: Wiktor Dabkowski\/Bloomberg (Bloomberg) — Ursula von der Leyen was supposed to sign the European Union\u2019s largest free-trade…\n","protected":false},"author":3,"featured_media":460462,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[3638,440,16446,32947,50,28910,210272,33284,2856,103],"class_list":{"0":"post-460461","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world","8":"tag-bloomberg","9":"tag-europe","10":"tag-european-commission","11":"tag-luiz-inacio-lula-da-silva","12":"tag-news","13":"tag-photographer","14":"tag-south-american-countries","15":"tag-the-european-union","16":"tag-ursula-von-der-leyen","17":"tag-world"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115753115427575158","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/460461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=460461"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/460461\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/460462"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=460461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=460461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=460461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}