16 July 1998
France opposes EU-Mercosur pact

FRANCE and Germany are set to oppose an ambitious free trade agreement between the European Union and the Latin American Mercosur countries.

France has demanded a special debate by European Union (EU) farm ministers on the potential impact of the agreement.

European Commission attempts to agree a negotiating mandate for talks have already been delayed by fears over agriculture. Franz Fischler, EU agriculture commissioner, insisted on a full report on the agricultural implications of the proposed deal last week. This will be discussed by commissioners next Wednesday.

One of the issues France has raised is the risk of low-cost agricultural imports from the Mercosur countries into the EU, distorting the workings of the Common Agricultural Policy (CAP).

It says agreement with Mercosur would have to cover at least 90% of trade between the two sides to appease the World Trade Organisation – meaning agriculture products would have to be included.

This could make it difficult to defend the CAP in multilateral trade talks on agriculture which are due to start at the turn of the century.

France also warns that 51% of Argentinas exports are agricultural, along with 42% of those of Uruguay and 25% of Brazils.

The agreement requires multilateral support from all members states to become a reality.

  • Financial Times 16/07/98 page 5