As the European Union prepares to sign a free-trade agreement with Latin American countries, France, faced with unprecedented protests from the farming community, is one of the few member countries to oppose it. For its part, Germany, in the midst of a recession, is more than enthusiastic about the idea of seeing customs duties gradually lifted on its vehicle exports across the Atlantic, in return for opening up competition on foodstuffs.
“Meat for cars
This is the essence of the treaty that the European Union hopes to sign with the Mercosur countries by the end of the year. It would enable economic development through the free circulation of goods. It would remove customs duties in Mercosur on certain products from Europe, such as automobiles, clothing and wine , and vice versa on agricultural products such as meat, soya and rice imported from South America by the European Union.
While some see this as a strategic move for their exports, others, France in the forefront, are crying foul over the threat of competition perceived as unfair by their farmers.
An agreement 25 years in the making
The so-called Mercosur free-trade zone – a contraction of Mercado Común del Sur (Southern Common Market) – was concluded on March 26, 1991 with the Treaty of Asunción. It was signed by the four countries of Argentina, Brazil, Paraguay and Uruguay. They were joined in 2012 by a fifth country, Bolivia.
These five countries account for 80% of South America’s GDP , and are all major agricultural powers, led by Brazil, the region’s main producer. Along with Argentina, Brazil is also a giant in intensive livestock farming.
For its part,the European Union laid the foundations for its negotiations with these Latin American countries back in 1999.
The President of the European Commission, Ursula Van Der Leyen, is calling for the signing of such a free trade agreement with the five South American countries.
Should the agreement be adopted, it would be the largest ever signed by the European Union, both in terms of population (780 million inhabitants for the two markets ? in the case of its American partners to the south) and in terms of trade volumes, with between 40 and 45 million euros worth of imports and exports.
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