The press landscape has just celebrated the EU’s free trade agreement with the Mercosur states (Brazil, Argentina, Uruguay and Paraguay) as the world’s largest free trade area. It is celebrated as an alternative to Donald Trump’s protectionism. Yes, the good nice Europeans, they are much better than Donald Trump? That’s just the way it works. The fact that we are only superficially the good free traders here in Europe is demonstrated quite recently by the example of France.
Traditionally, France is strong in agriculture and the export of agricultural products. Germany, on the other hand, is strong in mechanical engineering and car production, and therefore focuses on these areas in foreign trade. France is known for aggressively defending its agriculture in foreign trade and also within the EU. And now there was the Mercosur Free Trade Agreement.
Mercosur agreement makes France a loser
Trade in goods between most of South America and the EU will largely be duty free. According to the EU Commission, customs tariffs for EU exporters will be eliminated for 91% of goods. For example, the existing tariffs on cars (35%), machinery (20%), medicines (14%), wine (27%), etc. will be completely abolished. Well, wine… that would be great for the French if they could now ship wine duty-free to Argentina? But let’s be honest… South America itself produces a lot of wine, which is even sold extensively in the EU.
The big winner of the Mercosur free trade zone will probably be Germany, because machines, cars, etc. will be delivered to end users in Brazil, Argentina, etc. much cheaper in the future. In South America, the big agricultural producers and livestock breeders in Argentina and Brazil are likely to be the big winners. They will probably ship considerably more soy, sugar, beef etc. to Europe! The loser in the EU would therefore be France with its strong agricultural lobby.
And apparently, after the adoption of the Mercosur Agreement last Friday, they made a lot of noise. And so it is very recent that French government spokeswoman Sibeth Ndiaye announces via French radio that France will not ratify the Mercosur Agreement. Environment Minister de Rugy is also thrown into the ring to emphasise that Brazil must ensure that no additional rainforest areas are cleared for additional exports to Europe. The newly composed EU Parliament must dismantle the Mercosur Agreement, he told “Europe 1”.
That’s what we mean: My goodness, did President Macron quickly discover the Greta in himself over the weekend? Did he suddenly grow a green thumb? No, no, no. It is about domestic agriculture. Macron probably sees (too late?) that France will be the loser number 1. So it’s best to put environmental protection in the spotlight of rejection, because at the moment that’s totally in line with the spirit of the times anyway? Demand for hardship rules for French cattle breeders and sugar growers. Well, Macron is currently doing a bit of the “Mini-Trump”, we might think. Free trade is all well and good, but not if someone in our country suffers a disadvantage as a result!
Bad job-haggling in Brussels
By the way: In the EU, the distribution of jobs is currently a bit of a mess. Mr Timmermans, who is a rather left-wing man, wants to have the most important job of President of the Commission. Anyone who has followed him through the last few years knows that Timmermans is not one to seek compromises. He will pursue a very left-leaning policy and will only continue to turn the populists in southern and eastern Europe against him. There is a video from 30st of June where Timmermans spoke with Bulgaria’s Prime Minister Boiko Borisov. Borisov offered Timmermans a deal, practically. Bulgaria will vote for him as EU Commission President if Timmermans promises to abolish the EU control mechanism for judicial reform and the fight against corruption and organised crime. He does not demand this literally, but the context is clear. It also wants to be included in the Schengen area. We do not know what Timmermans replied to this, because Timmermans himself is at the end of the video, noting that it is probably not so good to record all this on video…