Brussels to challenge France on trade deal with Latin America, says Valdis Dombrovskis

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Brussels to challenge France on trade deal with Latin America, says Valdis Dombrovskis

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The European Trade Commissioner said he wanted to conclude a trade agreement with the Mercosur group of Latin American countries despite objections raised by France.

President Emmanuel Macron last week launched a full-scale attack on the proposed pact, saying it would be disastrous for the French environment, farmers and industry.

But Valdis Dombrovskis, European Commission vice-president in charge of trade policy, told the Financial Times that a majority of EU countries supported the deal and that many of France’s concerns would be taken into account in the decision. final agreement.

“I think the French side should look at the actual content of this final agreement, which we are still negotiating, and to what extent it addresses the concerns expressed by the president,” Dombrovskis said.

Trade agreements are handled at EU level, so the Commission has full negotiating powers. Any deal must then be approved by a majority of member states, meaning France and Austria – which has also openly opposed the pact – would need several other countries to block its ratification.

“This is an agreement of major geopolitical and economic importance. We are committed to trying to do so. . . finalize this agreement,” Dombrovskis said.

Mercosur, which includes Brazil, Argentina, Uruguay and Paraguay, represents a valuable reward for EU exporters.

The deal would create a market of 780 million people and save European companies more than 4 billion euros a year in taxes, according to the commission. European companies are investing 330 billion euros in the Mercosur region. Trade in goods between the two blocs represented 119 billion euros last year.

Regarding Macron’s climate concerns, a commitment to implement the Paris Agreement, which pledges to keep global warming below 1.5 degrees Celsius, would be an “essential element” of the agreement, Dombrovskis said.

Brussels was also working on additional sustainability requirements, including commitments to protect the Amazon. In addition, the EU has already introduced laws banning the import of products made on deforested land and taxing carbon-intensive imports, he said.

Dombrovskis said both sides were “in the final stages” and progress could be “very fast”, even if Mercosur had its own counter-demands.

Javier Milei, Argentina’s new president, supports the deal, as does Germany, which is working to reach a conclusion. German Chancellor Olaf Scholz said the deal was “necessary” more than 20 years after negotiations began.

“I call on all stakeholders to demonstrate maximum pragmatism and willingness to compromise so that we can finally bring this matter to a successful conclusion,” Scholz said at a joint press conference with Brazilian President Luiz Inácio Lula da Silva in Berlin last week.

The Brazilian leader called France “protectionist” as the deal would allow more South American meat and agricultural products into the EU.

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An EU official said Macron had “internal political reasons” since opposition leader Marine Le Pen was against the deal. But previous trade deals have boosted French exports such as cheese, wine and cars. “Many French companies will benefit from it. And the produce industry will benefit greatly.”

Dombrovskis said he hoped to conclude the deal by mid-2024, meaning it would be up to the next European Parliament, elected in June, to ratify the deal.

To speed up its implementation, the Commission may provisionally apply the agreement on trade in goods, with the agreement of national governments and the European Parliament. Investment protection will only take effect once national parliaments, some of which are deeply skeptical, ratify the entire deal.

Additional reporting by Guy Chazan in Berlin and Paola Tamma in Brussels

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