EU economic deal with Mercosur: Will it divide the Union again?

EU economic deal with Mercosur: Will it divide the Union again?

A milestone for the EU: While EU Commission chief Ursula von der Leyen announced the conclusion of a significant trade agreement with the Mercosur states in Montevideo, she was entering a political minefield. The negotiations were originally initiated 25 years ago, and now the deal is in place, which is intended to offer new economic prospects to over 770 million people. Tariffs should fall, investments should be promoted and the markets should be opened to all sides. Von der Leyen describes this as an essential political necessity to strengthen connections between democracies the Süddeutsche Zeitung reported.

Political risk for von der Leyen

However, the agreement becomes a political issue. As von der Leyen notes, it risks further dividing the EU, particularly between Germany and France. While Chancellor Olaf Scholz supports the agreement, French President Emmanuel Macron is struggling with his political weakness. Despite the momentum from Montevideo, the EU could now be entering a new phase of disunity as member states such as France, the Netherlands, Austria and Ireland have raised concerns. Italy is positioning itself critically, which is why approval for the deal is shaky, several media reports.

The problems in Latin America cannot be ignored either. The Mercosur states increasingly have to face the challenges of global trade, especially the influence of China. This has become the main buyer of raw materials in South America and dominates the regional market. While von der Leyen praises the deal's success, environmentalists and unions warn of its potential negative impacts, such as an increase in deforestation and job losses due to cheaper imported goods from the EU. These critical voices could further fuel the debate about the trade agreement, says the Small newspaper.