Macron minister dashes EU hopes as France refuses to ratify EU-Mercosur trade deal

“The trade deal [with the Mercosur bloc] cannot be ratified by France in its current form,” Didier Guillaume told the French television channel CNews. “A number of things still need to be considered,” he continued, adding that an “independent commission” charged with assessing the pros and cons of the landmark accord would share its conclusions on Thursday. But “the question will not arise for another two or three years – we don’t know,” Mr Guillaume said.

The European Union and South American trade bloc Mercosur agreed a free trade treaty last month, ending 20 years of tough talks and committing to more open markets in the face of rising protectionism.

Negotiations between Brussels and Mercosur states – Argentina, Brazil, Paraguay and Uruguay – had repeatedly been hindered by EU farmer sensitivities over the beef market.

The EU becomes the first major partner with which Mercosur has signed a trade accord; although the bloc is already Mercosur’s biggest trade and investment partner and its second largest for goods trade.

The bloc says the deal will save EU companies more than £3.5 billion (€4billion) in trade duties each year. It will also cover markets that total some 780 consumers representing a quarter of global gross domestic product (GDP). 

Once the deal comes into effect, it is expected to remove 99 percent of agricultural and industrial duties on both sides, although it has sparked significant concerns about rising competition among farmers in Europe and industrial sectors such as automobiles in South America.

The bloc has pledged to open its markets to South American agricultural products via quotas: 99 tonnes of beef per year, an additional quota on 180,000 tonnes of sugar and another one on 100,000 tonnes of poultry.

In exchange, Europe wants greater access for manufactured goods, notably cars, which face tariffs of 35 percent. It also wants to sell more wine and cheese. 

Outgoing EU Commission President Jean-Claude Juncker said after the pact was announced: “This deal delivers a real message of support for open, fair, sustainable and rule-based trade because trade creates jobs for all concerned.

“This deal promotes our values and supports a multilateral, rules-based system.”

But the agreement has already triggered an outpouring of criticism, namely from the Copa-Cogeca union, which represents 23 million farmers across the EU. 

Copa-Cogeca secretary-general Pekka Pesonen said on Twitter: “This deal will go down in history as a very dark moment.”

Before adding: “A deal encouraging double standards trade policy and widening the gap between what is being asked from European farmers and what is tolerated for #Mercosur producers.”

France in particular is worried about the surge in beef, sugar and poultry imports and the respect of sanitary standards.

Christiane Lambert, a member of France’s powerful FNSEA agricultural union, slammed in a Twitter post the “unacceptable signature of a Mercosur-EU accord, which will expose European farmers to unfair competition and consumers to total deception”.

Mr Macron, for his part, welcomed a “good” deal but stressed his administration would remain “vigilant”.

The 41-year-old centrist said he was pleased the provisional accord explicitly mentioned the Paris climate agreement and contained guarantees that it would “respect” the bloc’s strict environmental and sanitary standards.

The pact also stands in stark contrast to US President Donald Trump’s rejection of multilateralism and protectionist “America First” policies.

Since taking power in 2017, Mr Trump has shunned multilateralism, renegotiated myriad trade deals and started trade wars with major allies, including the EU and China.

His aggressive stance on trade has encouraged the EU to distance itself from the US.

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