Brussels: Europe and the Arabs

Hours after European statements welcomed the European Council's decision to proceed with a long-awaited economic agreement with South American countries, French President Emmanuel Macron announced that his country would officially vote against the free trade agreement between the European Union and the Mercosur bloc. This escalation reflects the deep divisions within the EU regarding one of the most controversial trade agreements in recent years, ahead of a crucial vote scheduled for January 17 in Brussels, Belgium.

In a post on the "X" platform, Macron confirmed that France had decided to vote against the agreement, arguing that the EU-Mercosur agreement "belongs to an old era" and was negotiated on foundations that no longer align with current economic and environmental challenges. He added that the expected economic gains from the agreement would be "very limited" for both the French and European economies and would not justify the potential risks. The French president stressed that the agreement threatens sensitive agricultural sectors that represent a cornerstone of French food sovereignty, warning that farmers would be exposed to unfair competition from imports from Latin America, which adhere to less stringent production standards than European ones, according to the Cairo-based Youm7 website. The French stance came after months of intensive diplomatic efforts led by Paris to form a "blocking minority" within EU institutions, aiming to prevent the agreement's passage. France succeeded in garnering support from several countries, including Poland, Hungary, and Ireland, with Austria expected to join. However, Italy's position remained the decisive factor in the vote.

Indications suggest that Italy's inclination to support the agreement, after securing concessions from the European Commission, could lead to the collapse of the French strategy and constitute a direct diplomatic blow to Macron. These concessions include strengthening mechanisms for monitoring market disruptions and providing early financial support to affected farmers. If the agreement passes with a qualified majority, it will be the first time France has been bypassed in a vote within the Council of the European Union, potentially delivering a further political blow to Macron at a time when he is facing mounting domestic pressure and a complex political crisis in France.

Last Friday, a statement from the European Council of Ministers said that the Council had adopted two decisions authorizing the signing of the EU-Mercosur Association Agreement (EMPA) and the EU-Mercosur Interim Trade Agreement (iTA).

These two agreements together represent a milestone in the EU’s long-standing relationship with its Mercosur partners – Argentina, Brazil, Paraguay, and Uruguay. Once in force, they will establish a framework for political dialogue, cooperation, and trade relations within a comprehensive and modern partnership.

Both agreements require approval from the European Parliament before they can be formally concluded by the Council. The EU-Mercosur Comprehensive Partnership Agreement also requires ratification by all EU member states for it to enter into force. Before the weekend, European Commission President Ursula von der Leyen said that as we enter 2026, Europe has sent a strong message about the seriousness of our priorities. Our commitment to European competitiveness and creating growth opportunities for businesses and citizens, our commitment to diversifying our trade and reducing our dependence on external sources, and, in an increasingly hostile and competitive world, our clear commitment to strengthening our international partnerships.

Just three weeks ago, at the European Council, we assured our partners in the Southern Common Market (Mercosur) that we would visit them and make history together. During that time, we worked hard with our Member States and stakeholders to make this a reality. Today, this tireless work has borne fruit, and I welcome the Council's decision that allows us to move forward. I eagerly anticipate the signing of this historic agreement soon, under the newly begun Paraguayan Presidency, thanks to the wise leadership and fruitful cooperation of President Lula.

After 25 years of hard work, we have achieved a fundamental and mutually beneficial agreement that will boost prosperity and create enormous opportunities. This agreement heralds a new era of trade and cooperation with our Mercosur partners. But it is also proof of the strength and solidity of our relationship with Latin America, a relationship that will bring us even closer.

Under Mercosur, we are creating a market of 700 million people, the largest free trade area in the world. Our message to the world is this: partnership brings prosperity, and openness drives progress.

Europe's perseverance and dedication to its priorities and commitments are clear. At a time when trade and dependency are being weaponized, and the dangerous and self-serving nature of the reality we live in is becoming increasingly apparent, this historic trade agreement is further proof that Europe is charting its own course and standing as a reliable partner.

Let me briefly outline what this agreement will bring to Europe, because it benefits our citizens, our businesses, and every member state. Today, 60,000 European companies export to Mercosur, half of which are small and medium-sized enterprises (SMEs) that will benefit from lower tariffs, saving around €4 billion annually in export duties and simplifying customs procedures. Most importantly, it will provide our companies with better access to essential raw materials.

We have listened to the concerns of our farmers and our agricultural sector and have taken the necessary steps. This agreement includes strong guarantees to protect their livelihoods. We are also intensifying our efforts regarding import controls, because the rules must be respected, even by importers.

At the same time, we will capitalize on the opportunities this agreement offers our farmers. For example, this agreement includes 350 European geographical indications, more than any other EU trade agreement. 

This is a win-win agreement. As one of Mercosur's key trading and investment partners, this agreement will unlock more business opportunities and stimulate European investment in strategic sectors. EU exports to Mercosur are expected to grow by nearly €50 billion by 2040, while Mercosur exports are projected to grow by up to €9 billion.

Finally, this is more than just a trade agreement based on an equal partnership. We are creating a platform for political dialogue that will strengthen relations between Europe and Mercosur and enable us to achieve better alignment with our international partners.

I look forward to visiting Paraguay to begin this new era together.