EU’s Mercosur trade deal hits French, Italian roadblock

AFP | Brussels

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EU plans to seal a vast trade deal with South American bloc Mercosur this week were thrown into disarray yesterday as Italy joined France in demanding more time to sign off on it.

Twenty years in the making, the pact to create the world’s biggest free-trade area is backed by Germany and many of the European Union’s 27 nations, keen to diversify trade in the face of US tariffs.

The deal would allow the EU to export more vehicles, machinery, wines and spirits to Latin America, while facilitating the entry of South American beef, sugar, rice, honey and soybeans into Europe.

Fearing negative fallout for its agricultural sector, France has long been a holdout, but had failed to muster enough support to block the accord -- until now. With just days to go, Italian Prime Minister Giorgia Meloni broke cover on Wednesday and said Rome was not ready.

“It would be premature to sign the deal in the coming days,” she told parliament, arguing that some of the safeguards Italy wants to protect its farmers were still to be finalised.

The European Commission was expecting member states to give the deal their approval in time for EU chief Ursula von der Leyen to fly to Brazil to sign the deal with Mercosur partners Saturday.

That is now in doubt, though a commission spokesman said EU leaders will discuss the matter at a summit in Brussels Thursday -- as thousands of farmers converge on the city in protest.

Talks “could get pretty heated”, a European diplomat said, speaking on condition of anonymity.

Paris had already thrown a spanner in the works by calling this week for a delay to the vote, demanding robust safeguard clauses, tighter import controls and more stringent standards for Mercosur producers.

President Emmanuel Macron told a cabinet meeting Wednesday that France would “firmly oppose” the European Union forcing through the deal.

‘Refundable ticket’?

Key power Germany as well as Spain and the Nordic countries strongly support the Mercosur pact, eager to boost exports as Europe grapples with Chinese competition and a tariff-happy administration in the White House.

Spanish Agriculture Minister Luis Planas described the deal as “crucial” this week while the German government said its signing was “urgently necessary”.