Macron says it is “impossible” to reach a Mercosur-EU agreement

The President of France, Emmanuel Macron, said he was “impossible” reach a free trade agreement between the EU (European Union) and Mercosur (Southern Common Market). He asked the European Commission, responsible for the negotiations, to stop work on an agreement. The information is from Reuters.

“[Macron] very firmly reiterated to the committee the fact that it was impossible to conclude talks under these conditions”a French presidential advisor told journalists this Monday (29 January 2024).

The positioning comes amid a series of demonstrations by agricultural producers protesting against increases in the sector’s production prices and against competition from products imported from outside the European Union.

In addition to complaining about the entry of cheaper products from Ukraine, the category calls for an end to negotiations for a trade agreement with Mercosur countries. According to the sector, the measure would open up even more space for unfair competition with French products.

The protesters reached the 3rd week of protests this Monday (29th January) with the organization of a “I look for” a Paris.

Watch (1min4s):

In addition to France, Brussels and Germany also face successive protests from farmer groups against measures that, according to the sector, weaken the development of the area in their respective countries.

FRANCE TRIES TO BAR AGREEMENT

The position had already been announced by French Prime Minister, Gabriel Attal, on Friday (26 January). Attal said that the country would continue to oppose the movement towards economic rapprochement with South American countries.

Last week, representatives of both parties to the agreement met in Brasília, but made no progress in the debate.

While President Luiz Inácio Lula da Silva (PT) says he will not give up on the partnership “until you get a ‘no’”, Macron has emphasized, on different occasions, that the current proposal does not take into account France’s interests. At COP28 (28th United Nations Conference on Climate Change), he said that the agreement is “contradictory” with what the PT member proposes to do in Brazil.

Macron’s position, however, has the potential to end negotiations between the 2 economic blocs. This is because, to be approved, the agreement needs the approval of the 27 member countries of the European group. The decision would undermine Lula’s intention to revive the agreement, defended since the PT’s electoral campaign in 2022.

In addition, European Parliament elections will be held from June 6 to 9, 2024. In other words, nothing from the Mercosur-EU agreement should come out this year, as Lula wants.

MACRON x LULA

Lula and Macron have already faced different clashes throughout the process of formulating the agreement between the economic blocs.

In July 2023, the French president even said that he did not understand “threats” to Brazil in a proposal made to Mercosur countries. At the time, Lula criticized the “threats of punishment” set out in a letter sent by the European Union to the country. The group calls for the implementation of specific environmental parameters for the circulation of South American agricultural products in European territory.

“The European Union cannot try to threaten Mercosur with punishment if Mercosur does not comply with this or that. If we are strategic partners, you don’t have to make threats, you need to help”stated Lula during a weekly live broadcast on June 19.

In December 2023, during COP28, Macron announced that he would oppose the conclusion of the Mercosur-European Union agreement. He declared that the partnership would not take into account “climate biodiversity”.

“I cannot ask our farmers, our industrialists in France, and throughout Europe, to make efforts to decarbonize, to exit certain products, and then say that I am removing all tariffs to bring in products that do not apply these rules”said during the climate conference.

In response, Lula said it was a “right” of the president expressing his contrary position. “France has always been the toughest country to make an agreement because France is more protectionist”he told journalists at the event.

LULA QUOTES

The president was very optimistic throughout 2023 regarding the EU agreement with Mercosur. All your predictions proved wrong. Lula confused a certain sympathy from European governments for his victory against Jair Bolsonaro (PL) in 2022 with support for reaching an agreement on free trade.

Here are some of Lula’s statements about the now failed agreement with the European Union:

• 29.ago.2022 – “If we govern this country again, our relationship with the European Union will be very strong. The work so that we can carry out and implement the Mercosur-European Union, South America and European Union agreement will be worked very hard by us”;
• 21.set.2022 – “If I win the election, I will take office and in the first 6 months we will conclude the agreement with the European Union. An agreement that takes into account the need for Brazil to return to industrialization”;
• 25.jan.2023 – “It is urgent and necessary for Mercosur to reach an agreement with the European Union. […] We will intensify discussions with the European Union and sign this agreement so that we can only discuss a possible agreement between China and Mercosur. And I think it’s possible”;
• 30.jan.2023 – “I want to tell Chancellor Olaf Scholz that we will close this agreement, if everything goes well, perhaps by the middle of this year”;
• May 25, 2023 – “Try to stay alert. We are close to starting talks with the European Union about the agreement with Mercosur. And it’s important for you to know that one of the most important things they want from us is for us to give in to government purchases. But we will not give in because we will kill the possibility of growth for small and medium-sized Brazilian companies”;
• 3.jun.2023 – “What do Europeans want in the agreement? May Brazil open the doors to government purchases. In other words, they want the Brazilian government to buy foreign things instead of Brazilian things. […] And if they don’t accept Brazil’s position, there will be no agreement. We cannot give up on government purchases, which are the opportunity for small and medium-sized companies to survive in this country. […] Government purchases are industrial policy instruments that we will not give up. It’s going to take a little longer to close the deal, that’s okay. But, in the same way that France fervently defends its agricultural products, its wine, we will defend our small industry in this negotiation”;
• 12.jun.2023 – “I explained to President Von der Leyen Brazil’s concerns with the additional instrument to the agreement, presented by the European Union in March this year, which expands Brazil’s obligations and makes them subject to sanctions in case of non-compliance. The premise that must exist between strategic partners is mutual trust and not distrust and sanctions”;
• 15.jun.2023 – “The French parliament said it will not vote on the Mercosur-European Union agreement because of the amount of poison used in Brazilian agricultural products. So it is important for us to take into account that being rational, taking care of good quality agriculture is a competitive need for Brazil for China and France, for the United States and for Germany. […] I’m aware of what we did, I’m aware that their problem with us is ideological. It’s not about money. Let’s make a good Harvest plan, because we want Brazilian agriculture to continue producing, planting more and more, so that we can continue exporting”;
• 19.jun.2023 – “The European Union cannot try to threaten Mercosur with punishment if Mercosur does not comply with this or that. If we are strategic partners, you don’t have to make threats, you need to help”;
• 22.jun.2023 – “This proposed agreement does not comply with what I dream of for Latin American countries that want the right to recover their industrialization capacity. […] The additional letter that the European Union sent to Mercosur is unacceptable because it imposes punishment on any country that does not comply with the Paris Agreement, but even they did not comply. […] It is not correct to be discussing the agreement and someone thinks it is right to impose punishments on the agreement partner. An agreement presupposes a two-way street,” said Lula. “I know that the French are tough in defending their agriculture. It’s normal for them to be like this, but it’s also normal for us not to accept it. And this creates the opportunity to discuss”;
• 23.jun.2023 – “I’m dying to make a deal with the European Union. But it is not possible, because the additional letter that was made by the European Union does not allow an agreement to be reached. We will send the answer, but we need to start discussing it. It is not possible for us to have a strategic partnership and there is an additional letter threatening a strategic partner”;
• 24.jun.2023 – “It’s not protectionism that will help. From the 1980s until now, all people said was: the more openness, the better. The more free trade, the better. Now, when it comes to developing countries to compete on equal terms, the richest become protectionists. So it doesn’t make any sense. […] Macron has difficulty in Congress. And if we can talk to our friends on the left to get the Mercosur agreement approved, we will do it. […] We need to make an agreement with the European Union. And the European Union needs to make an agreement with Mercosur, with South America and Latin America. The European Union cannot remain the slice of mortadella between the new cold war between the USA and China. It is important to remember that we need the European Union and the European Union needs us very much”;
• 4.jul.2023 – “We did not accept the letter. We are now preparing another response, because we are going to Brussels to discuss with the EU and Latin American countries and we need to have an answer about what we want to consolidate the agreement. We want to pursue a win-win policy. We don’t want to pursue a policy in which they win and we lose”;
• 4.jul.2023 – “I am committed to concluding the Agreement with the European Union, which must be balanced and ensure the necessary space for the adoption of public policies in favor of productive integration and reindustrialization”;
• 17.jul.2023 – “The European Union is Brazil’s 2nd largest trading partner. Our trade flow could surpass the US$ 100 billion mark this year. A balanced agreement between Mercosur and the European Union, which we intend to conclude this year, will open new horizons”;
• 11.set.2023 – “And we have to reach a yes or no agreement in the coming months. Either do or stop arguing. It’s been 22 years”;
• 27.out.2023 – “If the two of us [Lula e Pedro Sánchez], that we are friends, if we don’t make a big effort to make this agreement, I don’t think it will happen. I want to get this agreement off the ground”;
• 21.nov.2023 – “Yesterday I called Úrsula von der Leyen, who is the president of the European commission, to tell her that I want to negotiate Mercosur while I am still president and I would like us to be able to make the agreement… and she tried to, who You know, at COP28, hold a meeting with me and present their definitive response to our demands. […] I shared my most nervous points with her, and she had to give me an answer. I asked Mauro Vieira (Foreign Affairs) to talk to her chief of staff to see what the most problematic points are”;
• 3.dez.2023 – “If there is no agreement, be patient. It wasn’t for lack of will. […] Don’t say anymore that it’s because of Brazil and don’t say anymore that it’s because of South America”;
• 4.dez.2023 – “I can only tell you that there will be no signature when the Mercosur meeting ends and I have a ‘no’. As long as I can believe that it is possible to make this agreement, I will fight to do it. […] And I won’t give up until I talk to all the presidents and hear everyone’s no. Then we’ll move on to another one”.