The European Commissioner for Trade Valdis Dombrovskis told the EU foreign affairs council trade press conference this week that “a conclusion of negotiations with Mercosur is within reach before the end of this mandate”.

Interestingly, while the Australian negotiation was namechecked, along with other negotiations that are ongoing, it was the Mercosur deal that he believes is closest to getting over the line.

There is little doubt about the enthusiasm of countries with a strong manufacturing, technical, pharma and auto industry for this agreement.

However, the fact that it has been stalled since the middle of 2019 when it was originally agreed is due almost exclusively to the huge volume of beef quota agreed for the South American countries at a time when rainforest clearance was at its highest for years.

A new government in Brazil just over a year ago meant something of a clampdown on rainforest clearance and in the middle of 2023, it looked like the deal would finally cross the line.

The arrival of Javier Milei as president of Argentina was a disruptive effect to put it mildly – he was even questioning Argentina’s continued participation in Mercosur, never mind this trade deal which he feared exposed Argentina’s domestic industry.

The other reality is that as the year ends and 2024 progresses, EU elections take priority and EU institutions tend to move into a more caretaker-type role. The major issues in Ukraine and the Middle East also have the effect of pushing trade deals down the priority list.

Farmer protests

If all that isn’t enough, there is the new dimension of farmer protests in Germany and France in recent days.

In an election year, that is the last thing that rural MEPs want dominating the headlines and while Mercosur isn’t the cause of the farmer protests, if the deal was signed off in this environment it would further fuel farmer protests.

It would be particularly difficult for France to endorse given the stance of opposition that President Macron has adopted and while the deal would suit German industry, the farmer protests have made a huge visual impression.

Valdis Dombrovskis, executive vice-president of the European Commission and Commissioner for Trade (right).

It also remains to be seen how high a political priority the deal is for the Belgian presidency. Their predecessor Spain held the rotating presidency up to the end of 2023 and they were considered the strongest advocates in the EU for the Mercosur deal.

They tried to make it happen, but didn’t succeed and, therefore, the farmer protests could be the final setback for concluding the deal ahead of EU elections and the appointment of a new Commission in the autumn.

Commissioner Dombrovskis is correct in saying that it is within reach, but there is huge doubt that member states will want to grab it with farmers on the streets and elections on the horizon.

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