‘A bad surprise’ says France, as EU provisionally implements contested Mercosur mammoth trade deal

BRUSSELS - The European Commission announced on Feb 27 it will provisionally implement

a mammoth trade deal

with the South American bloc Mercosur, prompting a public split between its two largest member states France and Germany.

EU chief Ursula von der Leyen announced the bloc would go forward - with agreement pending the EU top court’s ruling on its legality - after Argentina and Uruguay ratified the agreement on Feb 26.

“The commission will now proceed with provisional application,” Dr von der Leyen said in Brussels, recalling that member states had given the EU executive power to do so.

“Provisional application is, by its nature, provisional,” she added, saying: “The agreement can only be fully concluded once the European Parliament has given its consent.”

She hailed the ratification by the two South American countries as “good news”.

The deal still needs a green light from lawmakers in the European Parliament, which

referred it to the EU’s top court

within days of being inked in January.

France has led opposition to the deal and unsuccessfully attempted to block it over worries for its farmers, who fear being undercut by cheaper goods from Brazil and its neighbours.

French President Emmanuel Macron called the decision a “bad surprise” that ignored the European Parliament, but Germany and Spain welcomed the step.

“Companies and people from both continents can finally benefit from more prosperity and growth,” German Foreign Minister Johann Wadephul said.

EU ‘empowered’ to decide

Provisional application will begin on “the first day of the second month following the date on which the EU and Uruguay (as first Mercosur country to ratify) exchange notes verbales”, EU trade spokesman Olof Gill later clarified.

French agriculture minister Annie Genevard said the decision was “very damaging to the functioning of our institutions and, above all, to the spirit of our European institutions”.

But Mr Gill said EU states had “empowered” the commission to take such a decision.

The deal will provisionally apply to the Mercosur countries that have ratified it, Mr Gill told reporters, adding the commission anticipated remaining members Brazil and Paraguay would do so “soon”.

Reacting to Dr von der Leyen’s announcement, French EU lawmaker Celine Imart accused the commission of “showing contempt” for farmers.

“We will continue to fight with determination to ensure that this provisional application never becomes permanent,” she told AFP.

Agriculture worries

The deal between the EU and the four founding members of the Mercosur bloc – Argentina, Brazil, Paraguay and Uruguay – was a quarter century in the making.

The accord creates one of the world’s biggest free trade zones and eliminates tariffs on more than 90 per cent of trade between the two blocs, which together account for 30 per cent of global GDP and over 700 million consumers.

Farmers across Europe remain unconvinced and are up in arms, including in Spain where they staged a protest against the deal in Madrid earlier this month.

The European Commission, however, insists it has fully addressed their concerns by approving a series of safeguards for its producers.

Dr von der Leyen stressed the deal offered “countless opportunities”.

She added: “It allows our small and medium-sized businesses to access markets and scale they could only dream of before.”

Major exports from the South American grouping to the EU include agricultural products and minerals, while the 27-country bloc would export machinery, chemicals, and pharmaceuticals with smaller levies. AFP