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EU-Mercosur Trade Deal Faces Opposition Despite Historic Agreement

BusinessEU-Mercosur Trade Deal Faces Opposition Despite Historic Agreement
European Commission President Ursula von der Leyen has hailed the newly finalized Mercosur trade deal as a “win-win agreement,” marking a significant milestone in the European Union’s trade relations with South America. The deal, which has been nearly 25 years in the making, promises to create one of the world’s largest free-trade zones, with over 700 million consumers across the EU and Mercosur nations, including Brazil, Argentina, Uruguay, and Paraguay.

Speaking in Uruguay after the agreement was concluded, von der Leyen described the deal as “a win for Europe” and a “historic milestone,” emphasizing the importance of building trade bridges at a time when global trends are leaning toward isolation and fragmentation. While negotiations have been completed, the deal still requires approval from at least 15 of the EU’s 27 member states, representing 65% of the EU population.

Spanish Prime Minister Pedro Sánchez called the agreement “historic,” underscoring its potential to create an unprecedented economic bridge between Europe and Latin America. He expressed strong support for the deal, emphasizing Spain’s efforts to push it through the EU Council.

However, the deal has sparked significant opposition from several European nations. French President Emmanuel Macron reiterated concerns, declaring the agreement “unacceptable in its current state,” while Poland, Italy, and other EU members have voiced reservations. These countries are particularly worried about the impact of the deal on European farmers, with France and Poland leading the charge against the deal’s potential effects on agriculture. The Netherlands and Austria have also raised concerns.

On the other hand, Germany and Spain have strongly backed the deal, citing its potential to open new trade opportunities, particularly for Germany’s struggling manufacturing sector.

The Mercosur agreement, which includes significant tariff reductions, is set to turbocharge the flow of beef, grains, and other agricultural products from South America to Europe. In return, the EU will benefit from greater access to South American markets for products like cars, machinery, and pharmaceuticals. The deal has faced criticism from European farmers, particularly those in Ireland, who argue that it will lead to cheaper imports of South American beef, which they claim may not meet European food safety and environmental standards.

Irish Farmers Association President Francie Gorman expressed “huge concerns” about the deal’s impact on Irish agriculture, warning that it could flood the European market with up to 100,000 tonnes of cheaper beef, devastating local producers. Gorman and others have criticized the lack of traceability for beef exports from Brazil and its neighbors, particularly in terms of animal welfare and deforestation.

Von der Leyen has sought to address these concerns, assuring European farmers that the deal includes “robust safeguards” to protect their livelihoods and emphasizing the EU’s commitment to climate action and the Paris Agreement. However, the deal’s approval remains uncertain, with key EU members still weighing its long-term implications.

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