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The EU and South American countries are moving closer to finalizing a long-delayed trade deal, as European Commission President Ursula von der Leyen flies to Uruguay this week to attend the Mercosur summit.
Two officials said Ms von der Leyen was scheduled to travel to Montevideo in the next 48 hours with the intention of finalizing a deal, despite fierce opposition from French President Emmanuel Macron, who attacked the potential impact on farmers and the environment. He said he was on his way.
Brussels is determined to open up new markets for automakers and other industrial companies struggling with competition from cheap China and the threat of tariffs from President-elect Donald Trump.
But France, which is in crisis due to the collapse of its government, is rallying other member states to oppose a deal with the Mercosur trade bloc, which has been under negotiation for more than 20 years.
Mercosur, made up of Brazil, Argentina, Uruguay, Paraguay and Bolivia, is also vulnerable, but with President Trump in the White House, there is interest in increasing sales of beef and agricultural products within the EU.
Major soybean and meat producers such as Argentina and Uruguay also want to avoid becoming too dependent on China, which has become increasingly aggressive with its trade policies.
Brussels estimates that the deal will create a market of 780 million people and save European companies more than 4 billion euros a year in customs duties. EU companies have invested €330 billion in the Mercosur Quintet.
Von der Leyen is scheduled to head to the summit on Thursday and Friday, officials said. “She’s not going to fly to Montevideo and come back with nothing to show for it,” said one person.
Ignacio Baltesaghi, director of Uruguay’s Institute of International Business at the Catholic University of Uruguay, said Brazilian President Luiz Inácio Lula da Silva had told von der Leyen that even if political support for a deal remained in Europe, He said he may ask the leaders to announce the recent completion of technology negotiations at the summit. I’m wondering.
Mr. Lula is trying to defuse tensions within Mercosur caused by Argentina’s liberal president Javier Millei and “hopes to demonstrate some success,” Mr. Bartesagui said. Mr Millais has expressed disdain for the EU and is expected to use the summit to demand a loosening of external trade rules.
A minister from one Mercosur country said von der Leyen was expected to attend, adding that “negotiations are underway” to conclude a deal. “It depends above all on the EU,” he said.
Polish Prime Minister Donald Tusk recently said he opposes the deal in its current form. Austria has pledged to try to stop it, and the Dutch parliament has also passed a resolution condemning it. But to muster enough votes to block recognition, another large member state like Italy would need to join the ranks of opponents.
Germany, Spain and many other member states have pushed hard for the agreement to become a reality.
The agreement was only preserved with the election of former Brazilian populist leader Jair Bolsonaro. The EU insisted on a declaration containing binding commitments on protecting forests and combating climate change. Negotiations accelerated last year with the return of leftist Mr. Lula, who wanted greater protection for Brazilian industries such as electric car makers.
The details of the final agreement have not yet been disclosed.
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European farmers and environmental charities have already vowed to rally against it. They argue that Mercosur farmers are damaging the environment and should not be held to the same standards when it comes to animal treatment and pesticide use.
Ratification in the EU will not be easy. Four or more states representing at least 35% of the EU’s population could block it. It also needs to be approved by the European Parliament.
Subsequently, a chapter covering trade in goods will come into force. Other areas, such as investment, could also be realized if all 27 parliaments agreed, but this is almost impossible.
The commission declined to comment.
Additional reporting from Rio de Janeiro by Michael Pooler
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