Davos Ends, Argentina Fails to Clear Path for Mercosur-EU Deal

Argentina's President Mauricio Macri pushed hard to unblock the Mercosur-European Union trade agreement, which has been in the works for over two decades. On Friday Macri met with French President Emmanuel Macron for further talks on the deal but left without positive results.

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One of the main obstacles to closing the trade deal is France’s objection to the entry of 70,000 tons of beef from Mercosur countries into the European market. Ireland and Poland also have concerns about the quota due to fears that an increase in agricultural imports could hamper their participation in the European market, Mercosur also rejects the suggest import allowance because it is deemed to be too low.    

Although the two heads of state expressed their support for the deal as “mutually beneficial,” in Macron’s words and a “gigantic opportunity for both regions,” according to Macri quotas around agricultural products remain an issue.  

Macron has given assurances to France’s agricultural sectors “we will always be clear about the red lines we impose on Europe in its negotiations.” According to El Pais Macron also told the Argentine president “we have to be vigilant not to destabilize the sector, which is of excellence in France.”  

The Mercosur bloc has its own concerns, such as procedures for public works contracts and mechanisms for resolving investment disputes.

South American heterodox economists have also voiced concerns, especially on the impact trade liberalization with Europe could have on the region’s new and developing industries and employment.

Negotiations are set to continue in Belgium next week.

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Mercosur countries have recently shifted toward a neoliberal agenda after institutional coups (Dilma Rousseff’s impeachment process) and electoral victories (Argentina) by right-wing parties. The current political configuration of the bloc could change after the scheduled presidential elections in 2018 for Brazil and Paraguay, hence the urgency of striking the deal.

During his interventions in the World Economic Forum in Davos, Switzerland Macri praised the potential Mercosur-E.U. trade deal and made it the center point of his visit. On Thursday he announced his meeting with his French counterpart stating “I hope he gives me good news. I’ve been told we have a problem with agriculture, let’s hope we can find a solution to that,” Macri said.

Davos is known for being the most relevant space to consolidate the neoliberal agenda of market liberalization, privatization, low taxes and deregulation; policies pointed to by activists around the globe for their in deepening economic inequality and environmental degradation.

As is common, this year’s annual meeting of the World Economic Forum was marked by protests against capitalist globalization. Activist Paolo Giraldi said about the forum “the goal of this policy is to reduce the planet to fire and blood and to assure the powerful people’s domination over the rest of the world.”

Swiss police had banned protests in Davos, however on Tuesday a march to protest United States President Donald Trump’s visit to the Forum broke a security cordon. Switzerland has deployed at least 5,000 soldiers and police to Davos, Democracy Now reported.