This is potentially the most important agreement in the history of both the European Union and the Southern Common Market (Mercosur). It has been under negotiation for more than twenty years and could therefore become the great lever that catapults the weight and influence of both continents in the world, or it could become a great frustration.
All of this came to light at the recent virtual meeting held at the Casa de América in Madrid in simultaneous connection with the Chamber of Commerce of Uruguay, the founding country of Mercosur and the driving force behind the final signing and ratification of the agreement.
Neither Europe nor Ibero-America are the same as they were more than twenty years ago when negotiations began between the EU and the bloc made up of Brazil, Argentina, Uruguay and Paraguay. Of course, trade flows between the two have not stopped in this time, which today amount to 122 billion euros, a figure that could be multiplied by five if this transcendental alliance had been concluded, according to Juan Fernández Trigo, the Secretary of State for Ibero-America and the Caribbean.
It is not too far-fetched to predict that either Spain's rotating presidency of the EU in the second half of the year will achieve the definitive signing of the agreement or the last chance to achieve it will have been irreversibly squandered. The global geopolitical struggle is so fierce that, if it is thwarted, it will be China that tries to take the EU's place, accentuating its penetration of the continent to the maximum, where it has multiplied both the massive purchase of raw materials and investments, although the latter have not yet reached the level of European investments, which Spain leads with a stock of direct investment of 66 billion euros.
Uruguay's vice-president, Beatriz Argimón, who acknowledges "the somewhat slow progress in defining the agreement", is optimistic, observing "auspicious characteristics" in this phase that should provide the definitive impetus.
It is certainly not easy to reconcile the conflicting interests between the respective agricultural and industrial protectionism of the EU and Mercosur, both of which fear that the agreement's tariff dismantling will result in the corresponding crises, in which the sectors affected would be severely impoverished with the consequent social tensions and turbulence. But having accepted the undeniable reality that, despite the overall goodness of the agreement, there will be losers, it is up to the political leaders of both blocs to improve the economic situation and the welfare of those affected. Only in this way will the legitimacy of trade agreements within the EU and Mercosur be strengthened, as Núria Vilanova, president of the Alliance for Iberoamerica Business Council, argues.
On the other hand, the pace of recent events in the world is so dizzying that reopening the chapters that were already closed in 2019 would be the shortest way for them to end in a resounding failure. Spain, which in principle has the support of Portugal and Germany, will have to make a great effort to convince other partners, such as France, Poland, Ireland and the Netherlands, that the environmental excuses they used to use, especially with regard to the preservation of the Amazon, pretexts behind which obvious protectionist interests were hidden, no longer apply.
In turn, Lula da Silva's Brazil, which seems to be more receptive than his predecessor, Jair Bolsonaro, will have to do the same with regard to its own compatriots, as well as Argentinians, Uruguayans and Paraguayans, that 'the EU-Mercosur agreement will be the key to modernising the regional productive matrix, accelerating the green transition, facilitating the transfer of technologies and promoting sustainable value chains through European cooperation', in the words of Núria Vilanova.
The head of European diplomacy, Josep Borrell, describes it as "the European Union's most important agreement", capable of bringing together 800 million people and with a volume of trade that would make it the fifth largest in the world. But, moreover, for the EU, which is fighting in the midst of the struggle between the United States and China, it would mean strengthening its own international role. As for Mercosur, it would also help it to emerge from its stagnation and peripheral situation. To miss the opportunity would therefore be to waste an opportunity that will not come again.