Seven members of the European Parliament (MEP) visited Argentina and Uruguay this week for high-level discussions on the EU-Mercosur association agreement. The European Union (EU) is in the process of defining the deal’s legal structure, which will have important ramifications for its path forward, while sustainability concerns remain on the agenda.

The Milei government’s ambivalence toward Mercosur is another topic of interest. MEP David McAllister, who chairs the parliament’s Committee on Foreign Affairs, and Argentine deputy Fernando Iglesias, who leads the Lower House’s Foreign Affairs Committee, downplayed the issue in a meeting with journalists, saying that the priority is getting the agreement ratified.

The MEPs’ visit comes as the European Union and Mercosur blocs prepare to ratify the agreement. The negotiations for the deal concluded in December after 25 years, and EU officials have told the Herald they “aspire” for it to be ratified by the end of the year.

The Committee on Foreign Affairs’ role is to guide “the procedure whereby Parliament decides whether to consent to the political and cooperation aspects of this agreement,” according to the European Parliament, and the visit feeds into that work.

Legal architecture

A key outstanding question is what legal architecture the agreement will have, since this affects the pathway for the deal’s ratification, said McAllister (Germany; European People’s Party). He added that that decision will fall to the Council of the European Union, likely under the Danish presidency, set to begin its term on July 1.

“There are three options. Because the EU-Mercosur agreement is so broad in scope, it combines areas of exclusive EU competence and areas of shared competence or even member state competence,” he said.

“We can have one single mixed association-type agreement like the CETA agreement with Canada, or like we have the agreement with Chile, a split package with an interim trade agreement where only a qualified majority is required in the council. [The second option is] an advanced framework agreement, which would require unanimity among member states. [A third possibility is to] have two legally distinct treaties concluded in parallel, like we did with Singapore and Vietnam. That hasn’t been decided yet.”

The text is currently undergoing the legal revision process known as “scrubbing” and will then be translated into all 24 EU languages.

Sustainability concerns

The EU-Mercosur deal was agreed in principle in 2019. Negotiations, however, were drawn out for another five years as Europe sought to obtain additional environmental commitments — chiefly on deforestation in Brazil. 

Sustainability remains a concern for Europe, McAllister said.

In an April report, the European Parliament voiced concern about the possibility that the deal could have a negative impact on EU sustainability and safety standards, as well as the EU agrifood sector’s competitiveness. 

“It also underlined that it would examine whether the agreement meets EU sustainability standards and complies with the reciprocity principle before ratification can be considered,” he added. 

“So this, I think, is the main angle the European Parliament is taking at the moment.” 

Milei and Mercosur

President Javier Milei said in January that he would seek a free trade agreement between Argentina and the United States. This would imply violating Mercosur regulations on countries making deals with other nations on the side. In March, he told Congress that in order to achieve such a deal, “it is necessary to be willing to make Mercosur more flexible or even leave it.”

While he was president, Uruguay’s Luis Lacalle Pou was vocal about his desire to make a trade deal between Uruguay and China. Mercosur countries’ foreign ministers recently agreed to an expansion of the list of products for which the bloc’s members can make exceptions to the common external tariff.

In response to a question from the Herald about Milei’s comments, McAllister said, “In the moment, we’re in the process of getting the deal ratified. We’re in the situation that we need to get the 27 plus four on board. It’s not so much about already thinking who might leave the deal.”

Iglesias added that Milei was not opposed to Mercosur and its agencies per se, but rather “with the uses to which those funds have been put and the ineffectiveness they have shown.” He pointed out that Milei has proposed more cooperation within the bloc on transnational organized crime.

“Nobody proposes the creation of organisms in a regional bloc if they’re not committed to it,” he said.

Iglesias went on to say that the recent Mercosur foreign ministers’ agreement meant the issue of countries making individual deals had been “completely overcome.”

Support for the deal is not unanimous. Some countries in Europe still oppose the deal, while in Argentina, Peronists such as former foreign minister and current deputy Santiago Cafiero have argued that it would harm national industries, among other concerns. Iglesias pointed out that the deal has a decade-long adjustment period for certain sensitive industries.

McAllister acknowledged that not all his colleagues supported the deal. However, he was emphatic that for him, a deal that was ideal for all parties was impossible — but that passing the agreement that exists is a priority. 

“There’s a lot at stake, and in the end you have to be very careful how you decide, because the alternative to concluding and ratifying the agreement would be for the agreement to derail. That we would fail,” he said. 

“And after 25 years of negotiations, what would that be for a signal?”

Cover photo: Meeting to discuss EU-Mercosur deal. Credit: EU delegation in Argentina