With the pro tempore presidency of Mercosur in these first six months of 2023, the government of Alberto Fernández is launching the attempt to resume the free trade agreement between this bloc and the European Union. But he wants to review some points on which he opposes, and says he has the support of President Luiz Inacio Lula da Silva to do so.
Thus Santiago Cafiero, who went to Brussels last week, brought the message of Fernández to the Europeans, who is going through the last months of his administration with a different position from the one he had in the electoral campaign.
So I proposed radically change the free trade agreement between the blocs and is now asking to revise some points. The caveats remain the same for Argentines and Brazilians. He heard them from Chancellor Olaf Scholz on 28 February.
Without naming names and without too many details, Scholz hinted that he would greatly revise or oppose what Mauricio Macri, his peers at the time and the 27 EU countries signed in mid-2019 – a historic treaty after more than twenty years of negotiations – but very preliminary and fragile – it can break everything and bring the negotiations between Mercosur and the Union back to zero.
It is worth mentioning that this treaty has stuck in a dead zone due to the reluctance of countries such as France, Austria and Ireland to ratify it. One of his excuses was the environmental policy of the then president of Brazil, Jair Bolsonaro. But the reality is that they protectionist policies, for example in agriculture, they hampered negotiations with an area rich in raw materials like Mercosur.
After the bad or non-existent relationship that the Europeans have had en bloc with Bolsonaro, Lula da Silva is enjoying the sweet welcome. And her government, which began on January 1, finds Europeans searching for the markets it set out to find after the food and energy constraints experienced with Vladimir Putin’s invasion of Ukraine. This prompts the interest of some countries, such as Germany, to terminate the treaty in the meantime that China does not beat them hand in hand.
Lula da Silva said during his visit to Fernández and then to President Luis Lacalle Pou, in Uruguay, that he hoped to conclude first of all the mentioned agreement between Europe and Mercosur, which began to be explored in 1995 and could never be closed due to the “but” from both continents.
But we need to decipher the true intentions of the Brazilian with that message. To begin with, he tries to expand Lacalle Pou’s enthusiasm for having closed his agreement with the Chinese and with the trans-Pacific bloc, with or without the endorsement of Mercosur.
Among all these reactivations of the dialogue, last week the French Minister of Agriculture, Marc Fesneau, opposed it. «For the moment we have said that the agreement was not acceptable. This does not mean that one day there will not be an agreement with Mercosur “, but he made it clear that, as it stood, the government of Emmanuel Macron would not ratify it. Curious because he was one of the leaders promoting the agreement of the 2019. “We want fair trade agreements”, Fèsneau said.
What do they say in the Chancellery?
One of the most important points that the Government wants to change is that of art public works contracts and wants to favor that access to tenders is national. In the 2019 agreement this is open. And indeed, Lula also showed now a supporter of the incomplete opening of the procurement market public. But Brazil’s economy is more open than Argentina’s and considerably larger.
In Brussels, last week Cafiero met with the High Representative for Foreign and Defense Policy of the European Union, Josep Borrell; with the Bloc’s Executive Vice President and Trade Commissioner, Valdis Dombrovskis; with the European Commissioner for International Associations, Jutta Urpilainen; the Commissioner for Energy, Kadri Simson and the Executive Vice-President and head of the European Green Pact, Frans Timmermans.
Agreed on forming working groups to address outstanding issues. “The vision of the four Mercosur countries is coordinated and there is the political will to advance in the negotiations. Also there would be the same political will in the European Union”, they say.
“We want a revised agreement with the European Union, adapted to a changing world and value chains” said Cafiero, to then affirm that the European authorities “have been receptive” to this change.
As an example, Cafiero cited the case of soy-based biodiesel, which accounts for 20% of Argentina’s exports to the EU, but whose terms were changed by the EU bloc months after the 2019 deal in scope of the European Union’s Green Pact to reduce CO2 emissions. The new requirements would leave Argentine products out of a market, to which the country has exported 1.2 million tons of biodiesel for $1.85 billion.
Cafiero reiterated to his EU counterparts Argentina’s commitment to continue working together, but they highlighted that the main obstacles to progress in the negotiations were posed by the European Union, in particular, through increased demands on the matter environment (Green Pact) which threaten to seriously affect exports from Mercosur countries.
Source: Clarin
