Push for Mercusor trade deal as Spain takes EU presidency

Spain’s assumption of the rotating European Union presidency this week has given fresh momentum to a push to conclude a Mercosur trade deal with Latin American countries that has been on ice since 2019.

The EU reached an agreement in principle with the Mercosur countries of Argentina, Brazil, Paraguay and Uruguay four years ago after two decades of negotiations, but the deal has since been held up due to concerns about deforestation of the Amazon.

“We want to push forward our EU Mercosur trade agreement, we want to push it towards the finish line,” said European Commission president Ursula von der Leyen in a speech launching Spain’s six-month presidency in Madrid alongside prime minister Pedro Sánchez.

She also referred to deals with Chile and Mexico that were ready to progress. “I here too count on the Spanish presidency,” said Dr von der Leyen.

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Leaders of the Community of Latin American and Caribbean States (Celac) are due to meet with EU counterparts in Brussels later this month in the first such meeting in eight years, seen by Spain as a crucial opportunity to copperfasten EU ties with a region with which it has deep linguistic and historical links.

“I think that Europe needs more allies than it has now,” Mr Sánchez told reporters. “Spain is convinced that Latin America and the Caribbean region can and must be among them.”

“For that reason, we organised the EU-Celac summit,” he continued. “We will discuss new trade and economic ties between the two regions ... we hope that this will mark a ‘before and after’ moment in the history of relations between the EU and the Latin American and Caribbean region.”

In a bid to unblock the trade deal, EU negotiators have pushed for an addendum to the agreement that would introduce obligations to respect climate change commitments.

This has drawn the ire of Brazil’s president Luiz Inácio Lula da Silva, who last month told reporters that the EU needed to set aside its “arrogance” and accused France of wanting to protect its agriculture industry.

Coalition government

Mr Sánchez takes on the rotating six-month presidency weeks from a general election in which he faces a tough challenge from the conservative People’s Party. Polls indicate the centre-right is on course to win the most seats in parliament, raising the prospect the presidency may change hands to be led by a coalition government including the far-right Vox.

A change of government in a country while it leads the EU presidency is unusual though not unheard of and has raised questions about the implications for the EU’s policy agenda given the key role played by the presidency in setting priorities and chairing negotiations.

On Monday Mr Sánchez said Spain had long experience from its four prior EU presidencies and would closely co-ordinate with other countries to maintain steady progress.

“Whatever the results of the elections are, I trust that the Spanish institutions will be able to deliver an effective presidency,” said Dr von der Leyen.

Mr Sánchez postponed a planned speech in the European Parliament in which he would have set out Spain’s priorities, and it will now be delivered in September by whoever is prime minister at that time.

On Monday he named Spain’s priorities as supporting Ukraine until it achieves victory against Russia, securing supply chains and economic security, strengthening alliances with Latin American and Caribbean countries and combatting climate change.