EU-Mercosur Trade Deal: Farmers Protest Provisional Application

Canberra – The European Union and Australia are poised to finalize a free trade agreement this week, despite ongoing protests from European farmers who fear increased competition from Australian agricultural products. The agreement, which would eliminate tariffs on most goods traded between the two regions, is expected to boost the European GDP by 4 billion euros by 2030, according to European Commission President Ursula von der Leyen.

Von der Leyen arrived in Australia on Monday for a three-day visit specifically aimed at securing the deal. She met with Australian Prime Minister Anthony Albanese in Canberra on Tuesday to discuss the final details. “I am convinced that this will be a great success,” Albanese stated to Parliament on Monday, expressing confidence in the agreement’s benefits for the Australian economy and employment.

The push for a trade agreement comes as the EU seeks to diversify its economic partnerships, having recently concluded a deal with India in January. Negotiations between the EU and Australia had stalled in 2023, primarily due to disagreements over quotas for Australian beef imports. The EU initially offered quotas of 30,000 tonnes annually, whereas Australia sought 40,000 tonnes. The current status of that specific negotiation point has not been publicly disclosed.

The potential agreement with Australia follows a controversial decision by the European Commission to move forward with the application of a free trade agreement with the Mercosur nations – Argentina, Brazil, Paraguay, and Uruguay – despite legal challenges and strong opposition from farmers and the French government. The European Parliament initiated legal proceedings in January to assess the legality of the Mercosur deal, but the Commission has opted for provisional application pending a ruling from the Court of Justice of the European Union, expected within a year and a half.

The French government has strongly criticized the provisional application of the Mercosur agreement, with government spokesperson Maud Bregeon warning in January that it would constitute “a form of democratic violation.” The FNSEA, a major French agricultural union, described the move as “a denial of democracy.” The Mercosur deal is intended to increase EU exports of vehicles, machinery, wine, and spirits to South America, while facilitating the import of South American beef, poultry, sugar, rice, honey, and soybeans into Europe.

Von der Leyen has emphasized the strategic importance of Australia as a source of critical raw materials, particularly lithium, which is essential for the production of electric vehicle batteries. Argentina, Brazil, and Uruguay have already completed their ratification procedures for the Mercosur agreement and have notified the European Union. Paraguay recently ratified the agreement and is expected to follow suit shortly.

The pursuit of these trade agreements highlights a broader effort by the EU to strengthen its economic position in a context of global trade tensions and competition from the United States and China. The Commission has not yet commented on the specific details of the Australian agreement beyond the projected GDP increase and the importance of critical minerals.