World trade: EU and Mercosur continue to work on free trade agreements

The European Union and the South American economic alliance Mercosur continue to push for a rapid conclusion to the negotiations on the free trade agreement between the two regions.

World trade: EU and Mercosur continue to work on free trade agreements

The European Union and the South American economic alliance Mercosur continue to push for a rapid conclusion to the negotiations on the free trade agreement between the two regions.

"The EU and Mercosur are holding constructive discussions to resolve outstanding issues within the framework of the treaty," they said in a joint statement. "Significant progress has been made in recent months. Negotiations will continue with the aim of completing the process and reaching an agreement that is beneficial to both regions and meets the demands and aspirations of their respective societies."

On Thursday, the heads of state from Brazil, Argentina, Paraguay and Uruguay met for a Mercosur summit in the Brazilian metropolis. Brazil's President Luiz Inácio Lula da Silva had originally wanted to announce a breakthrough in the negotiations at the meeting. At the German-Brazilian government consultations in Berlin on Monday, Lula and Chancellor Olaf Scholz pushed for the agreement to be concluded quickly.

But it failed mainly due to resistance from France and Argentina. At least in Buenos Aires, the government is changing on Sunday: the future president Javier Milei, as an ultra-liberal, is much more open to the planned free trade agreement.

Lula is optimistic

The EU's talks with Mercosur about the free trade area have been going on for 23 years. A fundamental agreement from 2019 will not be implemented due to ongoing concerns - for example about rainforest protection. French President Emmanuel Macron recently complained that industrial companies and farmers in Europe would be subject to strict environmental regulations in the future and that the free trade agreement would mean they would have to compete with competitors in South America who would not have to meet such requirements.

"We know that not everything always works out the way we would like. But we continue to move forward. I am always very optimistic. My motto is: never give up," Lula said at the summit in Rio. "There is nothing we cannot achieve. We must continue to try to reach an agreement with the European Union."

The agreement has been on hold since 2019

Environmental associations, on the other hand, welcomed the fact that the free trade agreement initially did not come about. "The good news for the planet is that this toxic treaty has not yet been signed," said Greenpeace trade expert Lis Cunha. "The bad news is that some countries, including the German federal government, want to continue to push forward with an outdated agreement that primarily benefits companies that are harmful to the climate and nature."

The agreement would create one of the world's largest free trade zones with more than 700 million inhabitants. Above all, it is intended to reduce tariffs and thus stimulate trade. However, the fully negotiated agreement has been on hold since 2019. The treaty is controversial in both South America and Europe. Some countries want to protect their markets, others fear that labor or environmental standards will be weakened.

"Based on the progress made in negotiations so far, both parties hope to quickly reach an agreement that reflects the strategic nature of the relationship between the two parties and the crucial contribution they make to addressing global challenges in areas such as sustainable development, reducing inequality and multilateralism," said the joint statement from the EU and Mercosur.

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