San Francisco Frontiers - EU chief lands in South America to try close contentious trade deal

The European Commission wants to conclude talks started more than 20 years ago with Brazil, Argentina, Paraguay and Uruguay on creating the world's biggest free trade zone.

Von der Leyen did not announce that she would travel to a Mercosur summit in Uruguay set to be dominated by the negotiations until she was on the ground in South America.

"Touchdown in Latin America," she wrote on social media platform X before the meeting. "The finish line of the EU-Mercosur agreement is in sight. Let's work, let's cross it," she added.

- 'Unacceptable' to France -

President Emmanuel Macron was quick to respond on X, warning her that France still considers the deal "unacceptable in its current state."

His office added: "We continue to tirelessly defend our agricultural sovereignty."

The draft treaty, under discussion since 1999, aims to eliminate most customs duties between the EU and Mercosur to create a vast market of more than 700 million consumers.

A political agreement was concluded in June 2019 but never ratified because of the reluctance of several countries, including France.

Sources familiar with the negotiations told AFP the new deal would include changes to "several chapters," including government contracts, services, intellectual property and the environment.

Von der Leyen will give a joint news conference on Friday in Uruguay with the presidents of Brazil, Argentina, Paraguay and Uruguay, EU officials told AFP.

The deal would allow the EU, which was already Mercosur's leading trade partner, to export cars, machinery and pharmaceutical products more easily.

It would also allow South American countries to sell meat, sugar, rice, honey, soybeans and other products to Europe with fewer restrictions.

A large majority of EU member states, led by Von der Leyen's native Germany and Spain, are now pushing to conclude talks as soon as possible.

Poland, however, is in France's camp.

Farmers in the two big EU farming nations fear being hit by unfair competition from South American food producers who operate to less stringent environmental, sanitary and labor standards.

To block the deal France and Poland need to forge a blocking minority of at least four countries representing 35 percent of the EU's population.

Italy's position could be decisive.

Italian Agriculture Minister Francesco Lollobrigida rejected the deal in mid-November, calling for South American farmers to be subject to the same "obligations" as their European counterparts.

"The text is still not satisfactory," an Italian government source told AFP this week.

- 'The Commission decides' -

A number of NGOs and left-wing activists believe that the creation of a vast free-trade zone will accelerate deforestation in the Amazon and worsen the climate crisis by increasing greenhouse gas emissions.

Campaign group Greenpeace called the text "disastrous" for the environment and sacrificing it for "corporate profits."

The push by the EU and Brazil particularly to get the deal done comes as Macron appears politically weakened after his government collapsed Wednesday in a no-confidence vote -- the first time a French government has been brought down by parliament in over 60 years.

Brazil's President Luiz Inacio Lula da Silva has shrugged off France's opposition, saying: "They no longer decide anything, it's the European Commission that decides."

But once a possible deal is signed with Mercosur countries, it will need to be ratified by at least 15 EU members representing 65 percent of the EU population, then by a majority in the European Parliament.

That is far from a given with Austria and the Netherlands having also expressed reservations.

Ignacio Bartesaghi, a professor of international relations at the Catholic University of Uruguay, said it was important for Lula to "show some success in Mercosur" to fend off pressure from Argentina and Uruguay for Mercosur states to be allowed to cut bilateral trade deals outside the bloc.

Argentina's President Javier Milei is pushing for a free trade deal with the United States.

B.Ramirez--SFF