EU proposes Mercosur trade deal, French opposition softens

By Philip Blenkinsop

BRUSSELS (Reuters) -The European Commission presented the EU's trade accord with South America's Mercosur bloc for approval on Wednesday and appeared to be softening opposition from the deal's main critic, France, with promises of possible limits on farm product imports.

The European Union and the bloc of Argentina, Brazil, Paraguay and Uruguay reached agreement to create the EU's largest ever trade accord last December, some 25 years after negotiations were launched.

It now needs consent in the European Union, requiring a vote in the European Parliament and a qualified majority among EU governments, meaning 15 of 27 members representing 65% of the EU population.

The Commission and proponents such as Germany and Spain say the Mercosur deal offers a way to offset the loss of trade due to tariffs imposed by U.S. President Donald Trump and to reduce reliance on China, notably for critical minerals.

France, the EU's largest beef producer, has previously branded the deal "unacceptable", while Poland, another farming heavyweight, has repeatedly expressed its opposition, an alliance that, with others, might have blocked the agreement.

Hoping to allay their concerns, the Commission proposed a mechanism that would allow preferential Mercosur access for some farm products such as beef to be suspended.

The trigger for the Commission to assess the need for such safeguards would be if the import volumes rose by more than 10% or prices fell by that amount in one or more EU member countries. It could take initial measures to limit imports within three weeks of receiving a complaint.

The Commission said it would closely monitor imports and also planned a 6.3 billion euro ($7.38 billion) crisis fund for EU farmers.

French Trade Minister Laurent Saint-Martin said on X that the safeguard clause was a step in the right direction.

Polish Prime Minister Donald Tusk said on Wednesday that his country continued to oppose the deal, but no longer had other partners to block it. This meant it was essential to have such a defence measure in place, he said.

OFFSETTING TRUMP TARIFFS

The EU executive has said the Mercosur agreement is the largest it has ever agreed in terms of tariff reductions and is a necessary part of the EU's push to diversify trade ties. 

Since Trump's re-election last November, the EU has hastily sought trade alliances, accelerating talks with India, Indonesia and the United Arab Emirates and deepening ties with existing free trade partners Britain, Canada and Japan.

The Commission will also present an updated EU-Mexico agreement, struck in January, on Wednesday.

European farmers have repeatedly protested over the Mercosur deal, saying it would lead to cheap imports of South American commodities, notably beef, that do not meet the EU's green and food safety standards. The Commission has denied this is the case.

European green groups also oppose the accord. Friends of the Earth has called it a "climate-wrecking" deal.

They hope it will be blocked, either in the parliament, where the Greens and far right are critics, or by EU governments. However it now appears that there will not be a large enough group of governments to reject the deal.

EU proponents of the deal see Mercosur as a growing market for European cars, machinery and chemicals and a reliable source of critical minerals for its green transition, such as battery metal lithium, for which Europe is now dependent on China.

They also point to agricultural benefits, given the deal would offer greater access and lower tariffs for EU cheeses, ham and wine.

($1 = 0.8542 euros)

(Reporting by Philip Blenkinsop in Brussels, Sybille de la Hamaide in Paris, Alan Charlish in WarsawEditing by Frances Kerry)