The EU-Mercosur trade deal faces a setback after the European Parliament backed a proposal to send the agreement to the EU’s top court for a legality check. Image source: Pixabay
After being signed on 17 January following years of negotiations, the EU-Mercosur trade deal faces a setback after the European Parliament (EP) backed a proposal on Wednesday to send the agreement to the EU’s top court for a legality check, according to a Euractiv report on the same date.
The free trade deal between the European Union (EU) and the Mercosur bloc of South American countries would have a significant impact on agriculture between the countries involved, World Grain reported on 20 January.
However, before taking effect, the agreement had to be ratified by the EP and the Mercosur countries, which includes Argentina, Brazil, Paraguay and Uruguay – all major beef, corn and soyabean producers, the report said.
Bolivia, the newest member, was not included in the trade deal but could join in the coming years, according to the World Grain report.
A narrow majority of 10 members of the EP (MEPs) was key to gaining approval for the resolution, which had been tabled by a cross-party group led by Greens and left-wing lawmakers and backed by liberals, socialists and centre-right politicians, Euractiv wrote.
The text asked the EU’s Court of Justice to verify that parts of the agreement complied with EU treaties, a process that could take over a year.
Commenting on the EP’s decision, the European Commission’s deputy head spokesperson was quoted as saying this came at a time “when the EU must deliver on its [trade] diversification agenda and demonstrate that it remains a reliable and predictable trade partner”.
The dispute centred around a mechanism that would enable Brazil, Argentina, Paraguay and Uruguay to challenge EU legislation, which could impact market access granted under the agreement, Euractiv wrote.
Although discussions on the trade deal started 25 years ago, negotiations had repeatedly stalled and restarted, the World Grain report said.
One of the biggest obstacles to finalising the deal has been the EU’s concern about how it could impact its farmers, particularly in its cattle sector as Brazil and Argentina are leading beef producers, according to the report.
EU farmers have been protesting in recent months, urging government officials not to sign the deal.
French farmers have said it created unfair competition with cheaper South American imports.
The EU feed industry, closely linked to the meat sector, was likely to see increased competition from Mercosur’s lower-cost agricultural imports, particularly beef and poultry, and could also provide cheaper raw materials, such as soyabeans, to feed millers, the report said.
In the grains and oilseeds sector, the Mercosur countries will export more of those crops to the EU, increasing competition for European farmers, according to the report.
The agreement would eliminate more than 90% of tariffs on products from both countries, World Grain wrote.
The vote took place against the backdrop of protests by farmers outside Parliament in Strasbourg, Euractiv wrote.