Back in September in her final state of the union address, European Commission president Ursula von der Leyen proclaimed her ambition to see the trade negotiation with Australia and renegotiation with Mercosur wrapped up by the end of the year.
The end of 2023 was a natural cut-off point for major new policy, as the EU institutions gear up for elections and the appointment of a new Commission in 2024.
The Australian negotiations collapsed over the level of beef access to the EU, with each side blaming the other.
However, confidence remained in getting Mercosur sorted under the Spanish presidency of the EU - Spain being Mercosur’s closest country culturally in the EU and prime advocate for the deal.
This was to be derailed by a combination of a new president with Mercosur doubts being elected in Argentina and French president Emmanuel Macron expressing the view that environmental amendments to the Mercosur deal agreed back in 2019 didn’t go far enough.
Farmer protests
As French farmers this week followed the lead of their German counterparts the previous week in bringing their tractors on to the roads, French president Macron is ramping up pressure on the Commission against Mercosur approval.
Mercosur has become the flash point for current protests, even though it isn’t the direct cause.
The greatest grievances among European farmers at present are in relation to arable-based products where it is supplied from Ukraine, not South America, that are impacting the market.
The big threat from Mercosur is fairly well confined to beef with the creation of an additional 99,000t quota, but beef prices across Europe are relatively stable at present.
Brahman cattle in Brazil.
The French government has taken a strong position on Mercosur ever since the agreement was announced in June 2019.
Immediately after its signing, then-French foreign minister Jean-Yves Le Drain and minister of state Jean-Baptiste Lemoyne moved to reassure the French parliament about ensuring full compliance with the Paris Climate Agreement and protection of environmental and health standards.
Brazil’s failure, in particular, to comply has been a major sticking point and while president Macron may have never gone as far as Austria in committing to opposing ratification of Mercosur, he has been a long-term sceptic.
European Commissioner for Trade Valdis Dombrovskis (left) welcomes Australia's trade minister Don Farrell on his visit to Brussels in June 2023. They came close, but never closed the EU-Australia deal.
China
This Thursday, he meets von der Leyen against the backdrop of tractors on the motorways. This gives him very little room for manoeuvre, even if he wanted to.
Meanwhile, Brazil has been building ever-closer trading relationships with China and has recently secured the approval of additional factories to export meat to China.
In 2018, when the Mercosur negotiation was coming to a conclusion, Brazil exported 322,000t of beef to China and 118,000t to the EU.
By 2023, their exports to China had increased to 1.2m tonnes, while the volume to the EU was 105,000t. Twenty years ago, China imported hardly any beef, whereas the EU then was importing 400,000t of beef from Brazil every year.
This and the new Argentinian president being sceptical about all things Mercosur means that the South American countries aren’t so desperate for a Mercosur deal that they will accept any conditions imposed by the EU.
Within Europe, while the industrialists, technology and pharma-based industries are all keen for a deal, farmer protests make it much more difficult, if not impossible.
Read more
Farmer protests complicate trade deals
Mercosur deal stumbles in sight of finish line
Mercosur and Australia deals by end of the year
Back in September in her final state of the union address, European Commission president Ursula von der Leyen proclaimed her ambition to see the trade negotiation with Australia and renegotiation with Mercosur wrapped up by the end of the year.
The end of 2023 was a natural cut-off point for major new policy, as the EU institutions gear up for elections and the appointment of a new Commission in 2024.
The Australian negotiations collapsed over the level of beef access to the EU, with each side blaming the other.
However, confidence remained in getting Mercosur sorted under the Spanish presidency of the EU - Spain being Mercosur’s closest country culturally in the EU and prime advocate for the deal.
This was to be derailed by a combination of a new president with Mercosur doubts being elected in Argentina and French president Emmanuel Macron expressing the view that environmental amendments to the Mercosur deal agreed back in 2019 didn’t go far enough.
Farmer protests
As French farmers this week followed the lead of their German counterparts the previous week in bringing their tractors on to the roads, French president Macron is ramping up pressure on the Commission against Mercosur approval.
Mercosur has become the flash point for current protests, even though it isn’t the direct cause.
The greatest grievances among European farmers at present are in relation to arable-based products where it is supplied from Ukraine, not South America, that are impacting the market.
The big threat from Mercosur is fairly well confined to beef with the creation of an additional 99,000t quota, but beef prices across Europe are relatively stable at present.
Brahman cattle in Brazil.
The French government has taken a strong position on Mercosur ever since the agreement was announced in June 2019.
Immediately after its signing, then-French foreign minister Jean-Yves Le Drain and minister of state Jean-Baptiste Lemoyne moved to reassure the French parliament about ensuring full compliance with the Paris Climate Agreement and protection of environmental and health standards.
Brazil’s failure, in particular, to comply has been a major sticking point and while president Macron may have never gone as far as Austria in committing to opposing ratification of Mercosur, he has been a long-term sceptic.
European Commissioner for Trade Valdis Dombrovskis (left) welcomes Australia's trade minister Don Farrell on his visit to Brussels in June 2023. They came close, but never closed the EU-Australia deal.
China
This Thursday, he meets von der Leyen against the backdrop of tractors on the motorways. This gives him very little room for manoeuvre, even if he wanted to.
Meanwhile, Brazil has been building ever-closer trading relationships with China and has recently secured the approval of additional factories to export meat to China.
In 2018, when the Mercosur negotiation was coming to a conclusion, Brazil exported 322,000t of beef to China and 118,000t to the EU.
By 2023, their exports to China had increased to 1.2m tonnes, while the volume to the EU was 105,000t. Twenty years ago, China imported hardly any beef, whereas the EU then was importing 400,000t of beef from Brazil every year.
This and the new Argentinian president being sceptical about all things Mercosur means that the South American countries aren’t so desperate for a Mercosur deal that they will accept any conditions imposed by the EU.
Within Europe, while the industrialists, technology and pharma-based industries are all keen for a deal, farmer protests make it much more difficult, if not impossible.
Read more
Farmer protests complicate trade deals
Mercosur deal stumbles in sight of finish line
Mercosur and Australia deals by end of the year
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