EU deal will hit industry: Argentine FM

BUENOS AIRES — Argentine Foreign Minister Santiago Cafiero on Monday described the Mercosur-EU trade agreement as "bad", as it will have "a negative impact on industry and agricultural exports" in the region.

The fate of the deal hangs in the balance this week when Brazilian President Luiz Inacio Lula da Silva hosts a summit of the Mercosur regional bloc.

The presidents of the Mercosur countries, Brazil, Argentina, Paraguay and Uruguay, will gather on Thursday in Rio de Janeiro, with the clock ticking down on promises from both sides to finalize a trade deal between the bloc and the European Union by the end of the year.

If the deal "is implemented as it is, exports would have to be restricted. It is a bad agreement," the foreign minister said.

"Along with the other Mercosur partners, we have proposed an additional agreement, where not only environmental commitments are discussed, but also elements that will not be so harmful to the agricultural industry and its exports," he said.

Cafiero called for heeding the potential impact of the agreement on employment and investments.

In 2019, Mercosur and the European Union reached a comprehensive trade agreement, which is still pending after Mercosur rejected environmental clauses that the EU attached to the trade deal earlier this year.

The meeting was originally supposed to seal a final version of the deal, which has been more than two decades in the making and would create the world's biggest free trade zone.

But last-minute bickering has erupted in recent days, with public criticism of the proposed deal from France and Argentina.

French President Emmanuel Macron, who met Lula on Saturday on the sidelines of the COP28 UN climate talks in Dubai, voiced his opposition to the deal, sharply criticizing supposed environmental shortfalls.

Agricultural powerhouse Brazil, the world's top exporter of beef and soy, notably faces accusations of tearing down the Amazon rainforest to make way for farming.

That chilled ties with Europe under former president Jair Bolsonaro, who presided over a surge in deforestation.

It is an image that Lula is fighting. Since he took office for a third term in January, his government has halved deforestation in the Brazilian Amazon from last year.

But Macron said the EU-Mercosur deal is "completely contradictory" with the anti-deforestation drive.

"It's a patchwork deal (that) …doesn't take biodiversity or the climate into account," he said.

Xinhua - Agencies