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Montevideo, May 22nd 2022 - 07:19 UTC

 

 

EU wants to sign stalled trade agreements, but with Mercosur objections persist

Thursday, May 12th 2022 - 10:52 UTC
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The trade offensive occurs amid the geopolitical fallout from Russia’s attack on its neighbor, prompting the 27-member EU to cement ties with allies such as US The trade offensive occurs amid the geopolitical fallout from Russia’s attack on its neighbor, prompting the 27-member EU to cement ties with allies such as US

The European Union aims to finalize and sign at least three stalled trade agreements this year as the bloc looks to reinforce strategic alliances amid the turmoil caused by Russia’s invasion of Ukraine.

The European Commission expects to conclude negotiations with Chile, New Zealand and Australia by the end of 2022 after progress had been stalled for months, according to EU officials.

The Commission, which is the EU’s executive arm, will also try to finalize legal texts to ratify agreements already struck with Mexico and the South American trade bloc Mercosur. Discussions are expected to be concluded next year.

The trade offensive takes place amid the geopolitical fallout from Russia’s attack on its neighbor, prompting the 27-member EU to cement ties with allies including the U.S. and leveraging a market of 450 million people.

Commission President Ursula von der Leyen visited India in April in a bid to deepen cooperation—and will meet with Japanese Prime Minister Fumio Kishida this week to discuss trade, security and defense.

Progress on trade negotiations have been slowed down to some degree because of the election in France, where trade politics have not played well with voters. Brussels has also dedicated significant efforts to address trade disputes with the U.S. which proliferated during former President Donald Trump’s administration.

Responding to a request for comment, a commission spokesperson said a rules-based, stable and reliable trade framework is now more relevant given the geopolitical context, based on partnerships with allies who share EU values.

During talks among EU member states last week, a group of ambassadors regretted lack of progress with the bloc’s trade agenda. Among those members anxious to advance with the deals were Spain, Sweden, Cyprus, Portugal, Denmark, Ireland, Malta and Finland. At least 10 member states are preparing a letter to the commission urging negotiators to speed up talks or push through agreements already finalized.

The conclusion of the trade talks between the European Union and Australia still could come in 2023, an EU official cautioned, given that the negotiations are less advanced than with Chile and New Zealand. Discussions were disrupted last year after the government in Canberra canceled a deal worth US$ 37 billion with France to build conventional submarines.

In the case of Mexico, the commission and member states disagree over whether the agreement should be concluded as a “mixed” deal, which would imply the ratification in the 27 national parliaments, and some regional chambers, risking local reactions among some members.

And regarding Mercosur, Argentina, Brazil, Uruguay and Paraguay, the commission needs to agree with the bloc on an instrument to tackle deforestation, methane and climate change, after concerns raised by a few member states mainly France.

Plus plus the fact that Brazil is holding presidential elections next October, and the business and industrial groups remain divided among those who favor an open economy, low tariffs and foreign investments, and the industrial lobbies insisting in more protection for the more traditional sectors, with ample support from organized labor.

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