European Trade Commissioner Valdis Dombrovskis: Implications for EU-Mercosur Trade Deal

2023-12-03 19:30:00
European Trade Commissioner Valdis Dombrovskis (Archyde.com)

European Union trade commissioner Valdis Dombrovskis has canceled his trip to Brazil, where he planned to finalize the trade deal between the bloc and the Mercosur group of countries, as prospects for completing the agreement this year diminish. The cancellation comes days before a meeting scheduled in Rio de Janeiro on December 7, which would involve Brazil, Argentina, Uruguay and Paraguay.

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The decision follows a series of setbacks, including the change of government in Argentina and publicly expressed opposition from French President Emmanuel Macron. The Frenchman sowed uncertainty following a meeting with Brazilian President Luiz Inácio Lula da Silva at the UN COP28 climate summit, pointing out concerns regarding the lack of environmental commitments. “I am once morest the Mercosur agreement with the European Union. It is a treaty that is completely contradictory to what [Lula] is doing in Brazil and with what we are doing,” declared Macron.

Macron’s comments have sparked frustration among EU officials, who had hoped to be close to sealing a deal that has been two decades in the making. The imminent inauguration of Argentina’s president-elect, radical libertarian Javier Milei, who has previously criticized the Mercosur bloc for its protectionism, has added further doubt. Although the future Foreign Minister appointed by Milei supported the agreement with the EU, the inauguration of the new government on December 10 further complicates the schedule, since the new appointments will not be in place for the Mercosur meeting.

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EU diplomats have commented that the chances of an agreement this year are diminishing, with one indicating that talks might collapse completely by the summer of 2024. Since a provisional agreement in 2019, there have been ongoing obstacles, mainly related to the EU’s desire to incorporate more environmental commitments.

According to the Financial Times, a Brazilian diplomat indicated that Brasilia intends to “continue working with the Commission.” [Europea] and the new Argentine government, since we are close to an agreement.” The next few days are crucial for the finalization of the treaty, coinciding with the end of Brazil’s rotating presidency in Mercosur, which would mark the first agreement of this bloc with one of its trading partners, encompassing countries with a total population of 780 million. of people.

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After two decades of arduous talks, in 2019 the EU and Mercosur reached a general political agreement to seal the pact, leaving pending the resolution of some technical aspects. But that discussion was complicated by the appearance of new demands on both sides of the table, particularly those related to EU environmental issues. Mercosur will hold its semi-annual summit between December 6 and 7 in Rio de Janeiro and hoped to announce the positive conclusion of the negotiations with the EU on those dates.

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