The Ratification of the EU-Mercosur Agreement from the European Perspective – Now or Never?

The EU-Mercosur Association agreement signed in 2019 took 20 years to negotiate. It is one of the biggest trade deals ever, covering 780 million people and 40 billion Euros of imports and exports (European Commission 2019). Yet, it remains unratified. So long has it been stalled that many senior political leaders see it as being on life-support. Chief EU diplomat, Josep Borrell, has argued that the deal is in the last-chance saloon and  will soon lose its purpose (Nolte 2023). Yet, a combination of political and practical circumstances means that the chances for ratification have improved. There is a small window of opportunity to finally bring this trade deal over the line. 

The purpose of this article is to trace the evolution of the ratification process from the signing of the agreement in 2019 to today. It will be argued that, today, for the first time since the signing, there is potentially enough political coherence on the European side to push ratification through. However, this coherence is unlikely to last. Equally, EU political leaders are unlikely to receive any political credit. As such, even if it does happen, for the EU and its leaders, the process is fraught with political risk. 

The article will be divided into three sections, starting with the signing of the agreement in 2019, looking at how the degree of coherence during the attempts to ratify the agreement in EU states has fluctuated over time. 

Before moving on to these phases, however, it is important to just briefly define the term “coherence”, as it will be used from here on in. For the purposes of the argument that follows, “coherence” is “the state of the system in which the parts fit together to establish system-wide patterns” (Eoyang 2001). These patterns allow for unified political action, here as it pertains to the European Union in relation to the association agreement with Mercosur. 

PHASE I: THE SIGNING OF THE AGREEMENT – (JUST ABOUT) ENOUGH COHERENCE

The signing of the agreement between Mercosur and the EU in 2019 created, potentially, one of the world’s biggest trade deals. Coming at the end of a tumultuous decade for the EU – with the economic crisis and, more specifically, the Greek sovereign debt crisis – the agreement was politically important to prove that the EU remained a trading superpower despite all the major crises it had gone through. As such, enough prestige was attached to concluding the deal to make it, collectively, worthwhile for the EU and its member states. 

Yet, this coherence was, in many ways, skin-deep. The agreement only became possible because many of the most controversial items were addressed in a very superficial manner or not at all. For instance, whilst the agreement talks a lot about the importance of environmental protection, especially in relation to the Amazon rainforest, and whilst it contains quite a few provisions about how these commitments can be made to ‘stick’ in practice, serious doubts were expressed at the time about how, concretely, these mechanisms would work. The same can be said about labor standards compatibility (European Commission 2019). 

What we see, then, is a classic tactic used by political actors and organizations in need of a ‘win’: they do what is possible and kick the really difficult questions, and the technical details, down the road. In fact, recent EU history is littered with examples of avoiding complex questions and conflict, such as the Greek sovereign debt crisis and what to do about Hungary’s (and Poland’s) slide into authoritarianism. The basic rule is to do what you can to move onto the next question (Lehmann 2018).

PHASE 2: COHERENCE DISINTEGRATES – COMPLEXITY CANNOT BE WISHED AWAY 

Yet, such an approach has an inherent problem. Complex deals are actually really complex. General commitments – on the environment or on labor standards, trade standards or indeed on anything else – eventually have to be turned into concrete policies and rules that can be enforced so as to not become worthless. Real rules have real-life consequences. 

As such, there was always going to be a debate with affected stakeholders about what this deal would actually mean in practice and it is here that the political coherence which had allowed for the signing of the deal began to, at least partially, give way, in no small part due to public mobilization, engagement with and by the sectors most impacted by the deal, and cold domestic political calculations. Let us briefly look at each one of these in turn. 

One of the most striking aspects about this deal is how little public support it always had. A YouGov poll in 2019 found that 82% of people wanted the deal stopped (EKO 2019). By 2021, opinion had softened a little bit, but was still clearly against the ratification of the deal, with 75% of respondents saying that the ratification should be halted (Gonzalez 2021).  

This hostility was driven to a large extent by concerns about the protection of the Amazon rainforest in particular and the environment in general. As Nolte (2021: 3) has stated: “[T]he protection of environmental and health standards in trade agreements has become a more important issue for European citizens.” He cites a survey by Eurobarometer in 2019 according to which 50% of EU citizens considered it important that, in trade deals, EU health and environmental standards are protected, which represents an increase of 20% from 2009. Such significant change undoubtedly has a political impact. 

Yet, what has been interesting to observe in the years since the signing of the agreement is the fact that opposition to the deal cut across sectors and political alignments. To cite just one example, an umbrella group called “Stop Eu-Mercosur” brought together more than 450 civil society organizations, according to its own website (Stop Eu-Mercosur). They include business groups, human rights defenders and those who simply worry that the structural economic inequalities which have been a hallmark of European-South American trade relations will actually be worsened by the deal (Paasch & Görne 2023).  

This hostility had some impact on the political process of ratification. Several national parliaments in EU countries stated unequivocally that they would not ratify the deal, as did the European Parliament. National governments – in France, in Ireland or Austria – saw political expediency in rejecting the deal in order to placate public opinion in the face of often significant domestic political and social instability. Here, the ascension of Jair Bolsonaro to the presidency in Brazil actually helped politically. As one senior German diplomat put it in a private conversation we had in 2019: “We can’t give him a win. Domestically, being seen with him […] would be poison”.  In other words, stalling the deal became much easier. Since the deal has to be ratified by all member states it looked to be moribund. 

So, what has changed to increase coherence around it and bring it back to life? At the same time, and as a consequence, what dangers lurk for EU politicians should ratification proceed?

PHASE 3: THE IMPORTANCE OF “EVENTS” – THE RETURN OF COHERENCE AND BEYOND

Events are critical tipping points in politics and, far more than the defeat of Jair Bolsonaro in the Brazilian elections of 2022, no event has had a bigger impact on Europe than the full-scale Russian invasion of Ukraine in February 2022. This war, which German chancellor Olaf Scholz called “a turning point in history”, forced the EU to re-evaluate its positions at break-neck speed, both in practical and political terms (Scholz 2022).

In practical terms, the main lesson the EU has taken from the war is the need to diversify. Most obviously this has been the case with regards to sourcing energy. Yet, as Josep Borrell made clear, the war has clearly shown the need for the EU to be autonomous across a range of areas, including, for instance, food security. Therefore, access to many different markets for different things is, in and of itself, seen as advantageous (European External Action Service 2022). 

Politically, the effective collapse of the post-Cold War European order also made it imperative for the EU to show the value of multilateralism, and quickly. As such, a “political win” at a time of severe crisis is seen as important. In fact, with recognition of Ukraine and Moldova as candidate countries for EU accession in 2022 and the emerging consensus around the need for Ukraine to win the war, the EU seems to be on the way “back to its roots:” an organization which sees its primary role as that of a “peace actor.” 

Bringing the Mercosur deal over line would fit in well into this overall narrative: one of the biggest trade deals in the world to show the value of multilateralism and underline the importance, and the draw, of the European Union which, in turn, would strengthen its position within the continent of Europe. In practical terms, it would clearly diversify the EU’s trade links and, therefore, the chances to source what it needs from a broader pool of partners, making it strategically more independent. The planned EU-Latin America summit in Madrid in July also helps in this sense: the symbolic importance of using a big summit to announce a big trade deal should not be underestimated. 

Yet, even if all of this were to happen, current coherence might not last. The Ukraine war might drag on into another winter which might not be as mild as the last one, increasing pressure by the European public to just end the war. Political instability in several of the EU’s bigger countries might get worse, France being the prime, but not the only, example. Austria is rocked by corruption scandals, and there is political instability in Ireland.  It might not be in those countries’ interests to press ahead with the implementation of a publicly unpopular agreement. 

CONCLUSION

As such, and in conclusion, there is no doubt that, at this moment in time, political conditions are more aligned than they have been for a long time to finally get ratification of the EU-Mercosur agreement done. Yet, this coherence is fragile and unlikely to last. The window of opportunity to get it done is small. Should it be slammed shut, the current deal might never actually get implemented.  Critically, even bringing ratification to a close during 2023, leaves a lot of practical questions – about implementation of the agreement, about judicial recourse, about the political implications of the deal – unanswered. Whatever happens over the next few months, we are still in the middle of a long process of evolving EU-Mercosur relations. 

References

EKO. 2019. “Poll: Vast Majority of Europeans Opposed to EU-Mercosur Trade Deal.” Eko.org, October 8, 2013. https://www.eko.org/media/poll-vast-majority-of-europeans-opposed-to-eu-mercosur-trade-deal/. 

Eoyang, Glenda. 2001. “Conditions for Self-Organizing in Human Systems.” Unpublished Doctoral Dissertation. Cincinnati, OH: The Union Institute and University.

European Commission. 2019. Key Elements of the EU-Mercosur Trade Agreement. https://ec.europa.eu/commission/presscorner/detail/en/qanda_19_3375. 

European External Action Service. 2022. “EU Ambassadors Annual Conference 2022: Opening Speech by High Representative Josep Borrell.” The Diplomatic Service of the European Union,  October 10, 2022. https://www.eeas.europa.eu/eeas/eu-ambassadors-annual-conference-2022-opening-speech-high-representative-josep-borrell_en. 

Gonzales, Jenny 2021. “European Public Roundly Rejects Brazil Trade Deal Unless Amazon Protected.” Mongabay, February 16, 2021. https://news.mongabay.com/2021/02/european-public-roundly-rejects-brazil-trade-deal-unless-amazon-protected/. 

Lehmann, Kai. 2018. “The Crisis of The European Union as a Complex Adaptive System.” Journal of Common Market Studies 56 (4): 971-988. https://doi.org/10.1111/jcms.12702. 

Nolte, Detelf. 2023. “A Last Chance at an EU-Mercosur Agreement. German Council on Foreign Relations External Publications.” DGAP, February 3, 2023. https://dgap.org/en/research/publications/last-chance-at-eu-mercosur-agreement. 

Nolte, Detlef. 2021. “‘The EU's Beef with Mercosur: Geo-economics Versus Climate Diplomacy”. Latin America’s Environmental Policies in Global Perspective Series (October 2021). Washington, D.C.: Wilson Center. 

Paasch, Armin & Madalena Ramos Görne. 2023. “EU-Mercosur-Abkommen: Handelspolitik im Retroformat.” Blätter für deutsche und internationale Politik 4 (April 2023). 

Scholz, Olaf. 2022. “Regierungserklärung in der Sondersitzung zum Krieg gegen die Ukraine vor dem.” Deutschen Bundestag, February 27, 2022. https://www.bundestag.de/dokumente/textarchiv/2022/kw08-sondersitzung-882198. 

^{Recebido: 10 de abril 2023}

^{Aceito para publicação: 11 de maio de 2023}

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