News Free Trade Agreement
Trade deal Mercosur on a thread?
After France and other EU countries, Germany also seems to be turning against the Mercosur free trade agreement. Chancellor Merkel has expressed himself critically and that is a striking move. It has doubts about the current form of the agreement between the European Union (EU) and the South American countries.
A hot topic in the Mercosur discussion is the ongoing deforestation in the Amazon region† This will create space for agricultural production in the north of South America, among other things. Reason for Merkel to have "serious doubts" about the implementation of the EU deal with the Mercosur countries Argentina, Brazil, Paraguay and Uruguay.
Ratification stalls
More than 2019 square kilometers of rainforest were cleared in the Brazilian Amazon between August 2020 and July 9.200. This is according to recent figures from the National Institute for Space Research. This would be an increase of 34%. A development that goes against the global fight against climate change. Partly because of this, the ratification, the official ratification, of the Mercosur free trade agreement has come to a standstill.
The Mercosur deal has long been the subject of controversy in the EU. After 20 years of negotiations, a agreement concluded, but this deal is far from being admired by everyone. There is a lot of criticism, especially from an agricultural perspective. European farmers fear unfair competition, because the standards in South American countries are often much lower. This includes the environment, animal welfare, working conditions and food safety. Cheap imports of items such as sugar, soya and meat could seriously disrupt the European market.
Position of the Netherlands
Mercosur is also being looked at critically in the Netherlands. At the beginning of June, the treaty was even turned down by the House of Representatives, much to the delight of farmers' and social organisations. That does not automatically mean that Prime Minister Mark Rutte will withdraw support for the treaty in Brussels, but it would be a logical next step.
A year ago, French President Emmanuel Macron threatened not to sign the agreement. The reason was that Brazilian President Jair Bolsonaro allegedly lied about his environmental promises. Ireland, Austria and Luxembourg are also opposing the Mercosur agreement for this reason. Until now, Germany, like Spain, has been one of the leaders.
Process of several years
It has now been over a year since the trade agreement with the Mercosur countries was concluded. It is now up to the European Parliament and the various Member States to ratify the agreement in principle. Once all member states have approved, a process that could take several years, the agreement will enter into force. Not all measures will then take effect at once. Many rates are gradually being phased out, depending on the conditions.
What Merkel's turnaround will mean for the progress of the process remains to be seen. It is clear that the thread on which the Mercosur deal hangs is becoming thinner and thinner.
Jeanette Pennings
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