MercoPress | 17 May 2022

Spain calls for a quick ratification of EU trade agreements with Chile, Mexico and Mercosur, but what else is needed?

Spanish foreign minister Jose Manuel Albares called on his EU peers on Monday to definitively advance in the ratification of the trade accords of the European Union with Chile, Mexico and Mercosur.

Albares emphasized before the foreign ministers meeting in Brussels, “there is no region in the world so Euro-compatible than Latin America, but Europe consistently turns its back on her... I am going to insist that we need to conclude, ratify, and definitively advance in the trade agreements with Chile, Mexico and of course Mercosur”.

The meeting was convened mainly to address the energy dependency from Russia, and the fact that several European countries are contrary to cut supplies immediately and are asking for time, until December 2023.

However the EU high representative for foreign affairs, Josep Borrell is expected to deliver a report on his recent visits to Panama and Chile, and in this context the Spanish minister will bring up the issue of trade accords. In effect Chile and the EU are negotiating since 2017 the updating of a trade accord first made effective in 2003. Brussels and Mexico have a political agreement since 2018 with the purpose of modernizing the original version effective since 2000, but which needs to be ratified.

With Mercosur the trade agreement was reached after twenty years of negotiations in 2019, but remains to be ratified since countries such as France, Austria, Poland, Ireland object, blaming Brazilian president Jair Bolsonaro for not respecting the Paris Accord on climate change, and who is accused of acting passively concerning deforestation in the Amazon

However further obstacles have emerged. In Chile there is a weak government and a rather chaotic constitutional assembly has called for a referendum on the country’s foreign policy and trade deals.

In Mexico president Lopez Obrador has limited foreign investments by insisting that the oil and minerals industries must be left for Mexican companies and in Mercosur, presidential elections will be held next October in Brazil and there is a formidable competition between two opposite businesses’ approach to open economies, foreign investment and the role of government in the economy.

On the one side is former president Lula da Silva, who is sponsored by traditional industry, which loves tariff protection, and on the other the current leader Bolsonaro and his orthodox Economy minister, Paulo Guedes, supporter of a limited role for government in the economy, and is even determined to privatize oil giant Petrobras, a milestone of Brazilian nationalism.