Opinion | EU losing 2 trade deals would look less like misfortune, more like carelessness

Hopes of a trade deal between the European and Latin American blocs have faded amid resistance from Argentina and France

Coming hard on the heels of the failure of the bloc’s trade talks with Australia, the collapse of an EU-Mercosur deal would signal that the constraints on trade liberalisation are growing again

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French President Emmanuel Macron speaks during a press conference during the second day of the EU Summit on December 15. Macron has seized upon a delay in negotiations over a trade deal between the European Union and Mercosur to register his strong disapproval given the potential effects on France’s agriculture sector. Photo: dpa

Published: 2:30pm, 21 Dec 2023Updated: 5:48pm, 21 Dec 2023

In Oscar Wilde’s masterful play The Importance of Being Earnest, first performed in 1895, Lady Bracknell famously says that “to lose one parent may be regarded as a misfortune, to lose both looks like carelessness”.

Fast forward more than a century and this same sentiment is being felt in much of Brussels with the potential failure of the European Union’s free trade negotiations with the Mercosur nations of Brazil, Argentina, Paraguay and Uruguay. The setback comes hard on the heels of the failure of the bloc’s trade talks with Australia.

Speculation had recently grown that an EU-Mercosur deal could be concluded in December. However, that prospect might have been extinguished after comments from the new Argentinian President Javier Milei, an anarcho-capitalist political maverick, as well as French President Emmanuel Macron.

The signals from Argentina are mixed as Milei criticised Mercosur during his campaign, but his Foreign Minister Diana Mondino said the new administration wanted to see a conclusion of the deal “soon”. However, Macron then came out with his own criticism. This is key because the deal might have to be concluded as an agreement covering the competences of both the EU and the 27 member states, which would give Macron the power of veto.

While the failure of neither the Australia nor possibly the Mercosur agreement is catastrophic for the EU, both are serious setbacks in several respects. First, EU trade negotiations will be put on the political back burner in 2024 with the European elections in June next year.

Argentina’s President-elect Javier Milei (left) speaks with Diana Mondino, expected to be foreign minister in the new government, on a balcony of the San Martin Palace at the headquarters of the Argentine Foreign Ministry in Buenos Aires on December 9. Photo: EPA-EFE

Second, the failure could slow Europe’s “de-risking” from China. The EU increasingly needs trade and investment deals with reliable political partners following Russia’s invasion of Ukraine and the bloc’s desire to reduce its reliance on China for raw materials.