Politico | 28 September 2022
Brussels looks to evade EU capitals to get Mercosur deal done
BY BARBARA MOENS AND JAKOB HANKE VELA
Brussels wants to speed up the process of getting a major trade deal done with Latin America’s Mercosur bloc, but EU countries are likely to balk at its shortcut.
Instead of plodding through the EU’s lengthy ratification process that requires a sign-off from every national parliament — and some regional parliaments as well — the Commission is negotiating with Mercosur’s Brazil, Argentina, Uruguay and Paraguay to split the agreement into different parts, according to two officials involved in the talks.
The split would mean that the trade part of the deal would be "EU only," meaning it will only need approval from ministers in the Council of the EU and from the European Parliament because it would only cover EU-level competencies. The Commission hopes this could speed up the deal’s implementation even if the final OK from the 38 countries and regions on the rest of the deal remains pending.
That legal fudge is not going to sit well with national capitals.
Member countries had asked the Commission to present the EU-Mercosur deal as a "mixed" agreement requiring all national parliaments to give their blessing. Paris in particular was clear that the EU’s deals with Mexico and Mercosur should remain mixed agreements, and is likely to view the split as an example of Brussels sidestepping capitals.
Belgian Green MEP Sara Matthieu slammed the move as undemocratic. "These major agreements have a lot of impact and should be debated within EU countries and national parliaments," Matthieu said. "What is the Commission so afraid of?"
Many things, it seems.
The EU-Mercosur deal is controversial. A number of EU countries, MEPs and activists have raised concerns about the alarming rate of deforestation in the Amazon rainforest, especially in Brazil, Mercosur’s largest member. European farmers are worried about cheaper South American produce flooding the market. Several national parliaments have already vowed to vote down the Mercosur deal in its current form.
For the Commission, all this makes dealing with individual national interests daunting, and an EU-only deal all the more attractive.
A Commission spokesperson said there is currently no “negotiations” underway, and that the EU executive is in the midst of carrying out technical work to finalize the trade part of the agreement as well as the legal revision of the texts. The legal basis of the deal will be decided at a later stage, according to the Commission.
New trade partnerships
The Commission’s attempt to make finalizing agreements easier on its end is in no small part because the EU executive has long faced difficulty in getting trade deals over the line.
The EU’s trade agreement with Canada, for example, has been provisionally in place for five years, but full ratification is still pending in many EU countries, including Germany and France.
Moscow’s invasion of Ukraine has made securing new trade partnerships, especially with more like-minded allies, an urgent mission for the EU. Brussels wants to diversify its trade flows to become less dependent on countries like Russia and, to a lesser extent, China.
The Commission believes the pending trade deals in Latin America, such as Mercosur, as well as other deals with Chile and Mexico, are key to achieving that goal. The agreement with Mercosur, which was concluded in 2020, is especially important, given it would cover a major market and be a huge boost to the EU’s relations with Latin America.
But outside of parliaments ratifying the deal, European officials themselves are also worried about deforestation, especially if Brazil’s far-right leader Jair Bolsonaro is re-elected this month in a presidential election.
The European Commission aims to negotiate an additional text with the Mercosur countries that would include more sustainability commitments — a politically sensitive topic on both sides of the negotiating table.