EU to propose Mercosur trade deal, facing France-led opposition

BRUSSELS: An EU trade accord with South America's Mercosur bloc will be presented by the European Commission on Wednesday for approval, pitting Germany and other countries that want new markets to offset Trump tariffs against chief deal critic France and its allies.

The European Union and the bloc of Argentina, Brazil, Paraguay and Uruguay dragged the free trade agreement over the line last December, some 25 years after negotiations were launched.

Now it will be put up for consent in the European Union, requiring a vote in the European Parliament and a qualified majority among EU governments, meaning 15 of 27 members representing 65% of the EU population. Neither is a given.

The Commission and proponents such as Germany and Spain say the deal offers a way to offset the loss of trade due to tariffs imposed by U.S. President Donald Trump and to reduce reliance on China, notably for critical minerals.

Since Trump's re-election last November, the EU has gone into overdrive in seeking trade alliances, accelerating talks with India, Indonesia and the United Arab Emirates and deepening ties with existing free trade partners Britain, Canada and Japan.

The Commission will also present the updated EU-Mexico agreement, struck in January, on Wednesday.

The EU executive has said the Mercosur agreement is the largest it has ever agreed in terms of tariff reductions and a necessary part of the EU's push to diversify trade ties.

France, the EU's largest beef producer and the most vociferous EU critic of the deal, has branded it "unacceptable".

European farmers have repeatedly protested, saying the deal would lead to cheap imports of South American commodities, notably beef, that do not meet the EU's green and food safety standards. The Commission has denied this is the case.

European green groups also oppose the accord. Friends of the Earth has called it a "climate-wrecking" deal.

They hope it will be blocked, either in the parliament, where the Greens and far right are critics, or by EU governments, which would be short of the required majority if, as might happen, Poland and Italy join France in opposing it.

EU proponents of the deal see Mercosur as a growing market for European cars, machinery and chemicals and a reliable source of critical minerals for its green transition, such as battery metal lithium, for which Europe is now dependent on China.

They also point to agricultural benefits, given the deal would offer greater access and lower tariffs for EU cheeses, ham and wine.