France seeks to persuade Poland to join forces to block a trade agreement between the European Union and Mercosur that has been in the works for around 25 years.
French Prime Minister Michel Barnier’s cabinet aims to convince Warsaw to form a coalition against the Mercosur pact, amid concerns that the European Commission – led by Ursula von der Leyen – is pushing negotiations to close the deal by the end of the year. Countries with a strong agricultural sector, such as Austria, Hungary and Ireland, could side with France in objecting to the agreement, sources close to the matter pointed out.
Poland has a history of protecting its agricultural sector from foreign competition. Last year, the previous government imposed a unilateral ban on grain imports from Ukraine, triggering a diplomatic conflict with Kiev. The Polish government did not respond to a request for comment.
“We are not against free trade, but this agreement is not acceptable as such,” French minister for European affairs Benjamin Haddad told Bloombergon the sidelines of a dome in Budapest. “When we impose norms and standards on ourselves, our trading partners must do the same, otherwise we shoot ourselves in the foot and harm our farmers and businesses.”
The trade pact with Mercosur — made up of Brazil, Argentina, Uruguay and Paraguay — has been postponed for a long time. It was initially agreed in 2019, but since then its regulation has been postponed mainly due to French objections.
READ MORE: European Union fulfills threat and taxes Chinese electric cars by up to 45%
Two people close to President Emmanuel Macron said the French attempt to block the deal remains a long shot as, under EU rules, Paris would need four member states representing at least 35% of the population to form a blocking minority.
Germany, which represents around a fifth of the EU’s population, is a strong supporter of the deal, along with Italy and Spain. The struggling, export-oriented German economy could benefit from the deal as it would open up the protectionist Latin American market to European exports such as machinery and automobiles.
Meanwhile, French farmers are fiercely opposed to the deal as they fear South American exporters could hurt their bottom line with cheaper produce.
France has been the pact’s main opponent and continues to demand “mirror clauses” that guarantee that the production restrictions that burden European farmers apply to their Mercosur competitors, which have less restrictive health and environmental standards.
In response to French concerns, the commission is considering a compensation package for French farmers affected by the deal, according to people familiar with the negotiations.
READ MORE: With Lula as president of Mercosur, experts point out challenges
Pascal Lecamp, a lawmaker from Macron’s party and a former executive at French export agency Business France, warned that any financial compensation is unlikely to appease farmers who are already struggling with low prices and bad weather. Lecamp is part of a cross-partisan group of 209 lawmakers in the French National Assembly who called on Macron to reject Mercosur.
A wheat farm in Leves, France. Photographer: Nathan Laine/Bloomberg
“I love Brazil and I am a strong supporter of free trade, but not at any cost,” Lecamp said in an interview with Bloomberg. “No compromise is possible in the short term, unless, for example, Brazil stops using antibiotics overnight.”
French farmers’ unions have called for demonstrations later this month, as sources close to the negotiations say the commission could aim to sign the deal possibly already on the sidelines of the G-20 summit in Rio in November.
The commission’s move to seal one of the biggest free trade agreements of all time is fraught with political risk. Von der Leyen would provoke a diplomatic war if she pushed for the deal at a time when high-stakes budget talks are underway in the French parliament, a person close to the French government said.
For Macron, the EU’s renewed momentum to complete the deal could not have come at a worse time, as his weakened government is struggling to balance the 2025 budget and could face a vote of no confidence before the end of the year.
READ MORE: International Integration Bridge, between Brazil and Argentina, will be auctioned in January
Brussels could also propose implementing part of the agreement on a provisional basis to avoid a long ratification process that requires the approval of each national parliament.
The division would mean that the commercial part of the agreement would be “EU only”, that is, it would not require the unanimity of the member states and only the approval of the European Parliament, as it would only cover EU-level competences. Brussels hopes this will speed up implementation of the deal, even if final approval of the rest of the agreement remains pending. However, there are still concerns that this move by Brussels could further fuel Euroscepticism.
Lecamp called Von der Leyen’s possibility of splitting the deal in two and approving key trade provisions on an interim basis, despite opposition from France, an anti-democratic “trick.”
An EU official said the commission was working to address the concerns of each member state and insisted on the protections offered by the pact.
A spokesperson for Barnier’s office declined to comment on Paris’ strategy to win concessions in Mercosur, adding that Macron and Barnier share the same goals of ensuring uniform standards for farmers on both sides and ensuring the agreement does not fall apart. refers only to the Paris climate agreement, but can also be suspended if the agreement is not respected.
