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EU says ‘fully committed’ to Mercosur deal as region comes into focus

Euractiv | 25 October 2022

EU says ‘fully committed’ to Mercosur deal as region comes into focus

By Alexandra Brzozowski

The EU is ‘fully committed’ to moving ahead with the stalling Mercosur free-trade deal with the South American bloc and should do so before “other actors intervene,” EU’s chief diplomat Josep Borrell said on Monday (24 October).

Speaking during a visit to Montevideo in Uruguay, Borrell said that “even for the protection of ecosystems, it is better to have mutual obligations than no obligations at all – an agreement is better than no agreement.”

“I am a firm believer that this agreement is mutually beneficial. In all trade agreements, you win, and you lose: you lose in protection, and you win in the market,” he added.

Progress on EU trade agreements has stalled in recent months. While negotiations for updated free trade deals with New Zealand, Chile, and Mexico are finished, the FTAs have not yet been signed.

The agreement with the South American trading bloc Mercosur has been stuck since 2019 due to trade protection and environmental issues on the side of some member states.

In recent years, France and Brazil have clashed over the conservation of the Amazon rainforest and its accelerated destruction under President Jair Bolsonaro.

Spain, which is set to hold the EU presidency in 2023 and has traditionally close ties with Latin America, is expected to seal the Mercosur deal at the latest.

To enter into force, all member states need to ratify the agreement.

‘Other players’

Borrell called on Mercosur member states and the EU to seal their agreement, cautioning that potential problems should an agreement not be finalised “will make other economic actors intervene.”

“No need to mention them, you know who I am talking about […] The corridors are filling up. I think it is in the interest of the Europeans to demonstrate a greater willingness to see the agreement finally come to fruition,” he said.

Uruguay is currently negotiating a bilateral FTA with China despite strong opposition from Argentina and Paraguay, which has overshadowed ties within the South American bloc.

LatAm strategy

While the bloc’s foreign policy agenda is expected to remain busy with Ukraine and the fallout of Russia’s invasion, the EU’s executive is set to unveil a series of new strategies for the first half of next year.

Relations with Latin America and the Caribbean are expected to return to the EU’s agenda, which comes at a time when the EU fears losing influence in the region as trade deals falter.

Earlier this summer, the EU’s diplomatic service shared a memo to the bloc’s foreign ministers which called for a “qualitative leap in relations” with Latin America and the Caribbean within 18 months.

Latin America, a big copper and lithium producer, is also a source of critical minerals for the EU’s green energy transition.

The renewed push for an improvement in relations also comes against the backdrop of the EU has started to pay more attention to increased Chinese influence in the region.

 source: Euractiv