France has long been resistant to the Mercosur agreement, but concerns over potential restrictions on EU exports to the US are causing this resistance to crack. Bank of France’s Governor François Villeroy de Galhau has suggested that existing and future trade agreements could help cushion tariff shocks stemming from US trade policy. The Mercosur agreement, which includes Argentina, Brazil, Paraguay, and Uruguay, would create one of the world’s largest free trade zones, impacting 750 million people and a significant portion of the global economy. France has raised concerns about unfair competition for its farmers and has advocated for the introduction of “mirror clauses” in the deal.
MEP Marie-Pierre Vedrenne, who has been critical of the Mercosur agreement in the past, has taken a more measured approach recently. While she still has reservations, she believes that blanket opposition to the agreement may not be reasonable. Despite acknowledging the evolving global trade context, France has maintained its opposition to the Mercosur deal. However, there is recognition that Latin American countries are exploring opportunities as the US market becomes more challenging, leading to calls for ambitious measures to protect the environment and farmers. The pressure to ratify the agreement has intensified with the imminent arrival of Friedrich Merz as Germany’s Chancellor and the EU’s efforts to diversify trade partnerships in response to US protectionism.
Countries like Ireland, Austria, the Netherlands, and Poland have expressed opposition to the Mercosur agreement, with Ireland particularly concerned about protecting its farmers. Italy, on the other hand, remains in favor of the deal but wants to ensure that the impact on agriculture is taken into account in the final text to be approved by member states. The European Commission has stated that it does not plan to make any changes to the text of the agreement and will send it to member states for approval by the end of the summer. The ongoing uncertainty surrounding President Donald Trump’s tariff war may influence the position of EU critics of the Mercosur deal, as they weigh the potential impact on their exports to the US.
Overall, there is a shift in France’s stance on the Mercosur agreement in response to changing global trade dynamics and concerns over potential restrictions on EU exports to the US. While the country has traditionally opposed the deal due to concerns about unfair competition for its farmers, there is now acknowledgment of the need to take into account the evolving trade context. Pressure to approve the agreement has intensified with the impending arrival of a new German Chancellor and the EU’s push to diversify trade partnerships amidst rising US protectionism. The position of other member states, both in favor and against the deal, will also play a role in the final decision on the Mercosur agreement.
