Amid escalating protests by French farmers against the EU-Mercosur trade agreement, the German car industry is proposing a novel solution—splitting the deal into two distinct parts, trashing French President Emmanuel Macron’s proposals to ditch the talks with the South-American bloc.
The contentious issue revolves around French opposition based on agricultural concerns, prompting calls to expedite the agreement to boost export markets outside China.
Macron firmly expressed his stance against the deal earlier this week in a bid to subside farmers’ protests.
He said: “France was asking for the agreement, as it stands, not to be signed.”
Macron stressed the challenge of imposing stringent environmental standards on farmers while allowing increased agricultural imports without similar rules.
But the German car industry sees the EU-Mercosur deal as a key driver for boosting exports to Latin America through reduced tariffs. Hildegard Müller, head of the German Automotive Industry Association VDA, lamented the prolonged negotiations.
He said: “Every agreement that is not concluded strengthens others and weakens us.”
Müller proposed a pragmatic approach to accelerate the deal—dividing the agreement into two parts. The idea is to provisionally apply less controversial aspects, such as customs duties, while deferring more contentious issues. This approach aims to showcase the positive impact of the deal and potentially alleviate concerns in other areas.
Germany’s Economy Minister Robert Habeck had previously echoed a similar sentiment, highlighting the complications arising from broad agreements covering multiple sectors. However, it remains uncertain whether this approach would be viable for the EU-Mercosur deal.
A European official said: “For France, splitting the agreement is not an option,” stressing the nation’s unwavering opposition.
In contrast, the German government remains committed to concluding negotiations, particularly for the benefit of export-oriented industries like automobiles and machinery.
While German Chancellor Olaf Scholz seeks swift finalisation of the deal, France’s Prime Minister Gabriel Attal pledged to simplify norms restraining farmers and protect them from unfair competition.
The EU-Mercosur trade deal is expected to be a focal point of discussion between President Macron and European Commission Chief Ursula von der Leyen at the European Council Summit on February 1.
As the debate unfolds, EU officials say they will continue “technical talks” on the EU-Mercosur deal.
Commenting on the issue, Italian MEP Paolo Borchia underscored concerns about unfair imports and calls for a review of the comparison between distinct agricultural models to protect the agricultural and livestock sector.
In a note sent to Express.co.uk, the ID coordinator in the ITRE commission and member of the European Parliament Transport commission said: “The European Commission believes that the conditions are not in place to reach a trade agreement with Mercosur. It’s good that Europe has finally woken up, but it’s not enough: we want the continuation of the negotiations to be interrupted, which are in all respects unfair imports.
“We, Lega, have always recognised the lack of similar criteria for the production of these agricultural products. We need reciprocity.
“Our objective is, therefore, to review the comparison between these two very distant agricultural models. We do not intend to allow an agreement to continue that does not protect the agricultural and livestock sector of the North-East and beyond.”
