And at the end, agreement was. Despite the fierce protests of European farmers, especially Italian and French, the President of the EU Commission Ursula Von der Leyen she flew to Montevideo, Uruguay, guest of the meeting of Mercosur, the South American trade union, and brought home the free trade agreement between the two continental institutions. The the final text had been in gestation for 25 years and in recent months it seemed to have fallen through, after the perplexities not only from the European side but also from the Latin American one, which complained about the entry into force at the end of this year of another law, the one on EU imports, which provides for rigorous anti-deforestation norms for the agri-food industry of the overseas partners.
The clash had led Von der Leyen to postpone the entry into force of the law until the end of 2025, and now the long-awaited green light has arrived for an agreement that is worth 25% of global GDP and involves 720 million people. In the future, with all due respect to the French president Emmanuel Macron who had called the agreement "unacceptable", pressured by farmers in his country, it will be easier for European companies to import and export, with an overall saving of 4 billion a year. Macron also suffers another defeat at an already delicate moment on the domestic front, while Germany and Spain were pushing in favor of the agreement. Italy is skeptical, with Foreign Minister Antonio Tajani who had spoken of "some necessary corrections", taking up the requests of the agricultural world and the League.
The numbers of the agreement: Germany rejoices, Italy and France are skeptical
La Germany after all it is the country that had more interest, given that according to a European Union study the treaty signed in Uruguay will generate nearly one million jobs in the Old Continent, of which 28% in Von der Leyen's country. Furthermore Berlin is the leading exporter European and the third largest importer, and the stagnation of its economy, which also has dangerous repercussions on the Italian one, will be able to benefit from exemption from duties and taxes for 91% of products.Italy It is the third largest European exporter to Mercosur, with a value of 1,2 billion euros per year, and the fourth largest importer, with just under 1 billion euros of goods purchased.
A third of the products arriving from South America to Europe are foods, and this is exactly what worries the agricultural industry, especially in France and Italy: the possibility that the market will be flooded with low-cost food, especially meat from Brazil, thanks to lower labor costs and less stringent environmental and health regulations. The agreement, however, provides for a gradual reduction of duties and maximum import quotas: the volume with the lowest tariff will correspond to a maximum of 2% of European consumption. signed text from Lula (President of Brazil), Javier Milei (Argentina), Luis Lacalle Pou (Uruguay), Santiago Pena (Paraguay) and Ursula Von der Leyen will also benefit the South American economies, especially the Brazilian one which has in Europe its second largest trading partner after China, with 92 billion dollars of trade in 2023: according to estimates, the GDP of the continent's locomotive will increase by half a point per year and in the long term exports will grow by 3%.
Von der Leyen: “A victory for Europe”. Milei ready to sign with Trump
"IS a victory for Europe – commented Von der Leyen -. Thirty thousand European companies already export towards Mercosur, many others will follow. But above all we have sent a message to the world: in a time of conflict, we are demonstrating that democracies can still be strong. It is a political necessity, not just an economic one”. As regards environmental and health regulations, the subject of strong controversy on both sides of the Atlantic, the President of the Commission reassured: “The agreement means more work and more opportunities, and will respect our climate commitments and our health standards, which remain untouchable". One of the points of the agreement, which renegotiated the partial one of 2019, was the inclusion in the text of the constraints of the Paris Agreements: in case of serious violation, the treaty may be immediately suspended.
To help its South American partners in the transition, the European Union has allocated a fund of 1,8 billion euros for the sustainable development of local industry. The die is cast, but the road to making the agreement a reality is still long, given that the text will have to be ratified by individual countries and not all seem willing to do so. Yet Europe would have a great need for it, at a time when China is getting its hands on Latin America and when the president-elect of the United States Donald Trump is announcing tariffs at full blast. South America itself is not so united: Argentine President Milei, making his debut at a Mercosur meeting, has signed the treaty but is critical of its the very existence of Mercosur and has already announced that his country will close, on its own, a free trade agreement with Trump's United States.
