Germany and Spain urge EU to back Mercosur trade deal as France resists

By Philip ‌Blenkinsop

BRUSSELS, Dec 18 (Reuters) - German Chancellor Friedrich Merz and Spanish Prime Minister Pedro Sanchez urged EU leaders on Thursday to ‍back a ‌contentious free trade pact with South American bloc Mercosur but French Prime Minister Emmanuel Macron insisted it was still ⁠not ready.

Some 25 years in the making, a trade pact ‌with Mercosur would be the EU's largest in terms of tariff cuts.

Germany, Spain and Nordic countries say it will help exports hit by U.S. tariffs and reduce dependence on China by providing access to minerals.

"This trade agreement is the first of many that must come so ⁠that Europe gains geo-economic and geopolitical weight at a time when it is being questioned by clear adversaries, such as (Russian President Vladimir) Putin, or even by ​traditional allies," Sanchez said.

"If the European Union wants to remain credible in ‌global trade policy, decisions must be made now," added Merz, ⁠in Brussels for a Ukraine-focussed summit.

Critics of the pact, however, fear cheap commodities flooding the market to the detriment of European producers.

European Commission President Ursula von der Leyen is poised to travel to Brazil to sign the agreement ​concluded last year with the bloc of Argentina, Brazil, Paraguay and Uruguay. 

However, she needs support from EU governments and it is unclear whether there will be the required majority of 15 countries representing 65% of the EU's population.

Poland and Hungary are opposed and France and Italy are nervous about the impact on farmers from increased imports of beef, sugar, poultry ​and other products.

'WE ‍ARE NOT READY,' SAYS MACRON

France is ​the EU's largest beef producer.

"As we speak, we are not ready; the numbers do not add up to sign this agreement," Macron said, adding France had been working with Poland, Belgium, Austria and Ireland to force a postponement.

EU lawmakers and governments reached a provisional agreement on Wednesday on safeguards designed to cap imports of sensitive farm products, such as beef or sugar, and to soften opposition. The European Commission is also due to issue a declaration committing to ensure aligned production standards.

However, Macron said ⁠there needed to be reciprocity, so that for example crops sprayed with pesticides banned in the EU could not be imported.

Outside, some 150 tractors had gathered in Brussels as the ​leaders met, most jammed in the main road leading from the summit venue, others in front of the European Parliament, where some farmers let off firecrackers or hurled potatoes at police.

"Why import sugar from the other side of the world when we produce the best right here? Stop Mercosur," read a sign on one ‌tractor.

Beyond the EU district, police set up roadblocks and closed tunnels, while riot police and water cannon stood ready for action.

(Reporting by Philip Blenkinsop, Inti Landauro, Benoit Van Overstraeten, Louise Breusch Rasmussen; additional reporting by Angeliki Koutantou in Athens; editing by Andrew Cawthorne)