Talks between the South American bloc and countries such as the UAE and Japan are gaining importance
Spurred by Donald Trump’s tariffs, talks between the South American bloc and partners such as the United Arab Emirates, Canada and India are gaining renewed importance while a divided EU wavers after more than a quarter-century. The prospect of rivals locking in preferential access to Mercosur’s markets, including critical minerals, is sharpening attention in capitals from London to Tokyo.
“We’re determined to deepen our trade ties,” Yasushi Noguchi, Japan’s ambassador to Brazil, said in an interview this week.
Japan is “very interested in how things happen” on the EU-Mercosur deal since Japanese companies often compete directly with European firms, he added.
Impatience about the EU surfaced at a meeting of Mercosur government leaders on Saturday after resistance from European farmers, particularly in France and Italy, once again caused a delay.
“Without political will and courage from its leaders, it will not be possible to conclude a negotiation that has dragged on for 26 years,” Brazilian president Luiz Inacio Lula da Silva told the summit he hosted on Saturday. “Meanwhile, Mercosur will continue working with other partners.”
European Commission president Ursula von der Leyen had been expected at the summit to sign the EU-Mercosur deal. She abruptly cancelled her trip after the EU failed to muster the votes to approve it.
Ursula von der Leyen had been expected at Saturday’s summit to sign the deal. Photo: Getty
European officials are now aiming for a mid-January ratification. Italian prime minister Giorgia Meloni, who holds the key vote, told Mr Lula this week she’s confident she can support the agreement if she gets more time to rally domestic support.
Mercosur, which groups Brazil, Argentina, Uruguay, Paraguay and Bolivia, previously accepted a last-minute EU demand for safeguard measures to protect its farmers.
EU countries such as France and Poland have long opposed the deal, arguing that giving access to South America’s behemoth agricultural industry would hurt European farmers.
Bloomberg Economics estimated the deal would trigger as much as a 0.7pc economic boost by 2040 for Mercosur countries, and 0.1pc for Europe.
Yet the EU stands to gain the most geopolitically, by expanding in a part of the world where China is increasingly gaining ground, according to the analysis.
The EU-Mercosur deal remains the holy grail for South America. It would create an integrated market of 780 million consumers and likely boost industries such as agriculture while increasing European investment in the region.
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