MNI: EU-Mercosur Deal Close, But Likely Short-Lived-Officials
MNI (BRUSSELS) - European Union negotiators are close to clinching a trade agreement with South America’s Mercosur bloc later this week, but European Commission President Ursula von der Leyen will weigh the implications for France’s teetering government before she signs a deal, which would run a high risk of being blocked by member states anyway, officials in Brussels told MNI.
While Germany is in favour of a deal with Mercosur, in order to secure greater access to South American markets for its troubled car industry, France and Poland have made clear their strong opposition. Italy’s agricultural minister opposes a Mercosur pact while its foreign minister is in favour, and if Rome decides against a deal it will be virtually dead, officials said.
“France and Poland alone are not enough but to go against these big two will also be risky for the Commission,” one source said, noting that French President Emmanuel Macron, whose government is on the verge of collapse, would be implacably opposed. “Macron has enough troubles at home, and there is overwhelming opposition to Mercosur which is demonised. He would not survive. I think the French will do everything to kill it”.
France’s National Assembly voted against the agreement last week by a 72% majority, with one trade source warning that France was likely to be “closed down” by farmers should von der Leyen go ahead.
FRENCH CONFIDENCE VOTE
The countries of Mercosur, whose active full members are Brazil, Argentina, Uruguay, Paraguay and Bolivia, expect to sign a deal at a meeting in Montevideo from Dec 6-8, after decades of negotiations and talks with the Commission in Brazil last week, MNI understands. But while Von der Leyen’s newly-appointed Commission wants to continue to promote freer trade, she will be mindful that Macron’s prime minister, Michel Barnier, risks losing a possible confidence vote as soon as this week as he tries to steer a contested 2025 budget plan through the National Assembly. (See MNI: EU Wields Anti-Coercion Tool, Aims At Trump Deal-Sources)
“There is a strong German pressure on VDL and the general mood in the trade committee is that geopolitically agreement is necessary. She might take a risk and sign it, being aware that it could be killed by member states later. But it is risky. And the backlash in France and Poland would be serious,” one official said.
Austria, Belgium and the Netherlands – which do not have fully functional governments for the moment -- also have reservations regarding a Mercosur deal but are willing to take a view after it has been signed, officials said.