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France breathes sigh of relief as Mercosur trade talks collapse

France breathes sigh of relief as Mercosur trade talks collapse

by host

PARIS — French officials are relieved that the free-trade deal between the EU and countries of the South American Mercosur bloc is unlikely to land anytime soon.

Brussels was hoping to push talks over the controversial trade deal over the finish line during a meeting in Rio de Janeiro this week. But negotiations faced a setback as Brazil — the rotating president of Mercosur bloc — signaled that the agreement will need the nod of the new Argentinian government led by anarcho-capitalist Javier Milei. The news prompted European Commission President Ursula von der Leyen and Trade Commisisoner Valdis Dombrovskis to ditch a visit to Rio de Janeiro at the last minute.

What sounds like bad news for EU negotiators is music to French ears.

“It’s good news,” said Marie-Pierre Vedrenne, a French MEP and trade specialist from President Emmanuel Macron’s Renew group, echoing the view of other French officials.

France has been a long-time opponent of the EU-Mercosur deal, arguing that it could only change its mind if the Mercosur bloc commits to stopping illegal deforestation in the Amazon, to complying with the Paris climate agreement, and to applying the same environmental and sanitary standards as EU farmers — a set of requests that South American countries have already slammed as excessive.

The move comes months ahead of elections to the European Parliament, with political groups on both the right and left looking to raise fears among voters that trade deals like the one with Mercosur — which groups Brazil, Argentina, Uruguay and Paraguay — could put European jobs and farmers’ livelihoods at risk.

“As soon as you say the words ‘free trade’ in France you face criticisms,” said Vedrenne, who has backed other trade deals. She said she regretted that it was the Mercosur side that put the brakes on the deal, and not the Commission deciding to take a more cautious view.

It takes time

The setback in talks was “no surprise” to a senior French diplomat who noted that there was no rush to wrap up negotiations. “It takes the time that it takes to resolve these issues,” the diplomat said.

Last Saturday, as the talks were collapsing, Macron slammed the deal again as he met with Brazilian President Lula de Silva at the COP28 in Dubai.

“I am not in favor of this agreement because I don’t know how to explain it to a steel producer, a farmer or a French cement manufacturer,” the French president said, announcing that he would fly to Brazil in March.

The EU-Mercosur deal is unpopular in France. It faces constant criticism from the country’s influential farming lobbies and NGOs, and can only count on the support of the country’s industry lobby MEDEF.

“Of course we feel reassured because it means that the agreement should be completely re-written, provided that there will still be an agreement,” said Pascal Lecamp, a French MP from Macron’s ruling majority and author of a parliamentary resolution that urged the government to oppose the Mercosur deal in its current form.

“Today, given the current situation in the world, the Commission should rather not be in a rush to sign any deal before the European election,” he added.

For Lecamp, Milei will have no political interest to sign the Mercosur deal. French officials agree that the election of Milei sparked further uncertainty over the future of the deal. During his electoral campaign, the incoming president said Argentina should leave the Mercosur bloc. On Monday Argentina’s future Foreign Minister Diana Mondino said she wanted to conclude the deal “hopefully, someday, somehow.”

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