MONITORING (SW) – The European Union reached a blockbuster free trade agreement with Brazil, Argentina and the three other South American nations in the Mercosur trade alliance, capping a quarter-century of on-off negotiations even as France vowed to derail the contentious accord.
Provided it is ratified, the accord would create one of the world’s largest free trade zones, covering a market of 780 million people that represents nearly a quarter of global gross domestic product.
The accord’s proponents in Brussels say it would save businesses some $4.26 billion in duties each year, slashing red tape and removing tariffs on products like Italian wine, Argentine steak, Brazilian oranges and German Volkswagens, reported AP.
Its critics in France, the Netherlands and other countries with big dairy and beef industries say the pact would subject local farmers to unfair competition and cause environmental damage.
From Uruguay, the host of the Mercosur summit, European Commission President Ursula von der Leyen hailed the deal as a “truly historic milestone” at a time when global protectionism is on the rise.
“I know that strong winds are blowing in the opposite direction, toward isolation and fragmentation, but this agreement is our clear response,” von der Leyen said, an apparent reference to U.S. President-elect Donald Trump’s vows to protect American workers and goods.
Under pressure from his country’s powerful and vocal farming lobby, French President Emmanuel Macron said Friday the deal remained “unacceptable” as it stands and stressed that governments have not yet seen “the final outcome” of negotiations.
“The agreement has neither been signed nor ratified. This is not the end of the story,” Macron’s office said, adding that France demands additional safeguards for farmers and commitments to sustainable development and health controls.
For France to block the deal, it would need the support of three or more other EU member states representing at least 35% of the bloc’s population.
The French government, which has been rallying countries to oppose the pact, named Austria, Belgium, Italy, the Netherlands and Poland as other wary states that share French concerns about the deal.
To take effect, the pact must also be endorsed by the European Parliament.
In remarks aimed at her “fellow Europeans,” and perhaps in particular French skeptics, von der Leyen promised the accord would boost 60,000 businesses through lower tariffs, streamlined customs procedures and preferential access to raw materials otherwise supplied by China.
“This will create huge business opportunities,” von der Leyen said.
She then turned to address European farmers who fear that an influx of cheap food imports will jeopardize their livelihoods. South American countries do not have to adhere to the same standards for animal treatment and pesticide use.
“We have heard you, listened to your concerns, and we are acting on them,” von der Leyen said.
Outrage over environmental rules, rising costs and unregulated imports has unleashed massive farmers’ protests across the continent over the past year.
