France is hoping to persuade Poland into joining forces to block a trade deal between the European Union and Latin America’s Mercosur bloc that’s been a quarter of a century in the making.
Prime Minister Michel Barnier’s cabinet is aiming to convince Warsaw to form a coalition against the Mercosur pact, amid worries that the European Commission – helmed by Ursula von der Leyen – is pushing negotiations to seal the blockbuster deal by the end of the year, people familiar with the matter said.
Countries with a strong agriculture sector such as Austria, Hungary and Ireland could potentially align with France in objecting to the deal, they said.
Poland has a history of shielding its agricultural industry from foreign competition. The previous government last year imposed a unilateral ban on grain imports from Ukraine sparking a diplomatic spat with Kyiv. The Polish government didn’t respond to a request for comment.
“We aren’t against free trade but this agreement is not acceptable as such,” France’s minister for European affairs Benjamin Haddad told Bloomberg on the sidelines of a summit in Budapest. “When we impose norms and standards on ourselves, then our trade partners must do the same, otherwise we shoot ourselves in the foot, and hurt our farmers and companies.”
The long-delayed Mercosur trade pact comprising Brazil, Argentina, Uruguay and Paraguay was agreed to in principle in 2019 but has mainly been held up by French objections since.
Two people close to President Emmanuel Macron said that the French bid to block the deal remains a long shot as, according to EU rules, Paris would need four member states representing 35% of the population to form a blocking minority.
Germany, which represents around a fifth of the EU population, is a strong backer of the deal, along with Italy and Spain. Germany’s struggling export-oriented economy stands to benefit from the deal as it would open the protectionist Latin American market to European exports such as machinery and cars.
French farmers meanwhile fiercely oppose the deal as they fear South American exporters could cut into their bottom lines with cheaper goods.
France has long been the chief opponent of the pact and has continued to call for “mirror clauses” guaranteeing that the production constraints that weigh on European farmers apply to their Mercosur competitors that have lower health and environment standards.
In response to French concerns, the commission is considering a compensation package for French farmers affected by the deal, people familiar with the negotiations said.
Pascal Lecamp, a lawmaker in Macron’s party and former executive with the 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 transpartisan group of 209 lawmakers in the French National Assembly who have called for Macron to reject Mercosur.
“I love Brazil and I’m a strong advocate of free trade, but not at any cost,” Lecamp told Bloomberg in an interview. “No compromise is possible in the short term, unless for instance 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 as early as on the sidelines of the G-20 summit in Rio in November.
The commission’s move to seal one of the largest free-trade agreements ever is fraught with political risks. Von der Leyen would provoke a diplomatic war if she were to push the deal at a time when high-stakes negotiations over the budget are underway in the French parliament, a person close to the French government said.
For Macron, the EU’s renewed impetus to get the deal over the line could not have come at a worse time, as his weakened government is struggling to balance the 2025 budget and could face a no-confidence motion before the end of the year.
Brussels could also propose to have part of the deal implemented in a provisional manner in order to avoid a lengthy ratification process that requires a sign-off from every national parliament.
The split would mean that the trade part of the deal would be “EU only,” meaning it will not require member states’ unanimity and only the approval of the European Parliament because it would only cover EU-level competencies. Brussels hopes this would accelerate the deal’s implementation even if the final go-ahead on the remainder of the deal stays pending. Concerns remain however that such a move by Brussels could further fuel Euroskepticism.
Lecamp called the possibility of Von der Leyen splitting the deal in two, and passing the key trade provisions on a provisional basis despite France’s opposition, an undemocratic “trick.”
An EU official said the commission is working to address the concerns of every member state and insisted on the protections offered by the pact.
A spokesperson in Barnier’s office declined to comment on Paris’ strategy to obtain concessions on Mercosur, adding that Macron and Barnier shared the same goals of ensuring uniform standards for farmers on both sides and making sure that the deal doesn’t just refer to the Paris climate accord, but can also be suspended if the accord isn’t respected.
--With assistance from Piotr Skolimowski.
(Updates with quotes from France’s European Affairs minister in fifth paragraph.)
