Mercosur-EU agreement collapses: Argentina does not sign and Paraguay asks to look at other blocks

Argentine Foreign Minister Santiago Cafiero reported on Monday that Argentina It will not accompany the signing of the agreement between Mercosur and the European Union at the summit of the South American bloc this week in Rio de Janeiro, because it will have a negative impact on the country’s industry and agricultural exports.

Argentina’s position puts a sharp brake on the desire of its neighbor Brazil and Spain – which currently hold the presidency of Mercosur and the EU, respectively – to advance with the trade agreement between blocs this Thursday at the summit of South American leaders after more after two decades of fruitless negotiations.

“If it is put into operation as it is, exports would have to be restricted. It is a bad agreement, which has a negative impact on the industry and agricultural exports.“Cafiero said in statements released by the Argentine Foreign Ministry.

Mercosur and the EU They took a historic step in 2019 by signing a political agreement that would support the subsequent free trade agreement, but it quickly encountered resistance on both sides of the Atlantic Ocean.

France has been one of the staunchest opponents because it considers that it does not comply with environmental standards to combat climate change. It also observes with concern the impact that the massive entry of raw materials of South American origin could have on its European producers.

On the South American side, Argentina He warned about the harmful effects for his industry that the import of European manufactures could imply and demanded that the asymmetries be contemplated.

“From our management we always proposed that it should be reopened (the discussion for the agreement) because it did not reflect a balance where the two blocks won, but rather more asymmetries, even more differences than those that exist in productive, financial, technological terms.“said Cafiero, who will leave office on December 10 when far-right president Javier Milei takes office.

Despite the discrepancies, Spain – in charge of the presidency of the Council of the EU—, the head of the community Executive, Ursula von der Leyen, and Brazil redoubled efforts in recent months to keep the negotiations alive and set Thursday’s summit as the deadline.

With a view to the Mercosur summit in Rio de Janeiro—the last activity abroad of the center-left Argentine president Alberto Fernández before handing over command—Cafiero warned that “We had been stating clearly since last week with the European negotiators that they did not have the necessary flexibility for this to be signed on Thursday and obviously the time is no longer sufficient.”.

On the other hand, the president of Paraguay, Santiago Peña, announced on Monday on the eve of assuming the pro-tempore presidency of the Mercosur that “we are already looking the other way”.

“My decision is to concentrate efforts in other areas“Peña said in statements to the media in his country. He explained that on Thursday the treaty with Singapore will be signed and that under his management he will focus on negotiating with the United Arab Emirates to sign an agreement “next semester”.