Malmström: Mercosur trade deal within reach but ‘not at any price’

European Commissioner for Trade Cecilia Malmstrom gives a press conference on EU-US Trade Talks in Brussels, Belgium, 15 April 2019. [Photo: EPA-EFE/OLIVIER HOSLET]

EU trade Commissioner Cecilia Malmström said on Monday (17 June) that a trade agreement with Mercosur countries could be concluded by the end of this mandate but “not at any price” as other trade partners await the outcome with “great attention”.

The EU and Mercosur countries (Argentina, Brazil, Uruguay and Paraguay) agreed that substantial progress has been made over the past few months, including on some of the stickiest points.

Commission pushes for concluding Mercosur deal by end of year

Despite France’s concerns about an EU-Mercosur deal, European Commission President Jean-Claude Juncker insisted on Friday (20 October) on reaching an agreement by the end of this year because it is “the most important” trade deal for Europe.

But Malmström explained that some difficult areas remain unsolved, notably in agriculture.

“Always in a trade agreement, when you are approaching the end, there are these really tricky issues on both sides, and very often they relate to agriculture, but not only exclusively,” she said.

EU tones down hopes of Mercosur deal by September

Despite EU and Mercosur countries remaining committed to reaching a trade agreement, the European Commission did not endorse the South American bloc’s target to reach an agreement by September, as substantial gaps remain between the two sides.

Wary of the outstanding issues, and how close to an agreement both sides were in the past, Commission President Jean-Claude Juncker said last week that it would be “difficult” to conclude the talks by the end of this mandate in October.

Malmström, an “optimistic person” in her own words, was more positive and said that “there is a good chance that we can finish this under this mandate”. The next Commission is expected to take over in November.

The EU-Mercosur agreement would be the largest trade deal to date, covering 750 million people. It would tie off progress made by this Commission, which has concluded trade deals with Canada, Japan, Mexico and Vietnam.

Strong signal

Malmström stressed that a trade deal with the South American bloc would send “a very strong signal to the world” about the support of both regions for free trade.

But the Swedish Commissioner warned that the EU executive would not conclude the negotiations “at any price”.

“Many people are watching this with great attention,” she said.

A European official told EURACTIV that concluding the process by the end of this mandate would depend on the “political willingness” of both sides.

In order to finalise the outstanding issues, at least an additional round of talks should be scheduled, most likely before the summer break. A round of technical talks would precede the political meeting.

Although both sides are in contact, EU officials explained that no new talks have been planned with Mercosur representatives yet.

EU officials did not want to detail the list of remaining obstacles but some of the EU’s complaints last year included geographical indications, dairy products, maritime services and industrial goods.

On the Mercosur side, access for its farm products, especially beef, continues to be the main bone of contention.

EU-Mercosur deal still faces farm and auto hurdles, Brazil says

Negotiators of a free trade deal between the European Union and South American bloc Mercosur want to wrap up by September, but differences over beef, sugar and the auto industry could dash those hopes, Brazilian foreign minister Aloysio Nunes said.

A European official highlighted the progress made on technical issues and on geographical indications.

On this issue, the same source added that both sides had made headway and that a solution was found for many of the Europe’s protected quality food and drink products.

Progress was made also on technical specifications, for example in regards to the rules of origin for the automotive sector (the degree of processing that must be carried out in a country for the product to claim originating status), or market access for some industrial goods, the European official explained.

But still, many loose ends have to be sorted out on market access, the official added.

Asked about the concerns raised by various NGOs about the risk of deforestation once the EU-Mercosur deal is passed, Malmström responded that the agreement will contain “an ambitious trade and sustainable development chapter,” with a reference to deforestation.

Macron threatens to scupper EU-South America trade deal over climate

French President Emmanuel Macron has warned that he will oppose a trade deal between the EU and Mercosur if Brazil’s incoming far-right president pulls his country out of the Paris Agreement.

[Edited by Sam Morgan]

Subscribe to our newsletters