Austria blocks EU trade deal with South America

MPs deal blow to agreement 20 years in the making by demanding a government veto

French farmers protest Mercosur last year
(Image credit: Thierry Zoccolan/AFP/Getty Images)

MPs in Austria have dealt a severe blow to the EU’s landmark trade agreement with South America, by demanding a veto on any deal.

The South American trade bloc of Mercosur includes four of the region’s biggest economies - Brazil, Argentina, Uruguay and Paraguay. A fifth member, Venezuela, is currently suspended due to the economic turmoil gripping the country.

The EU is already the bloc’s biggest trade partner, accounting last year for 20.1% of its trade in goods such as food, drink, farm products and tobacco.

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The draft agreement, which took 20 years to complete and has been described by the EU it as its biggest so far, would cover 780 million people, and “aims to remove trade barriers and promote high standards, with a commitment to sustainable management and conservation of forests and respect for labour rights”, says the BBC.

Yet despite the enormous effort that has already gone into the deal, its ratification by every EU government is far from certain.

DW reports the trade agreement, reached last June after almost a decade of negotiations, “was already in doubt due to concerns over fires in the Amazon rainforest and the politics of Brazilian President Jair Bolsonaro”.

France and Ireland have warned they will reject the deal if Brazil does not do more to curb fires in the Amazon rainforest.

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Now, all but one of Austria’s main parties have rejected the deal in a parliamentary sub-committee, with Jorg Leichtfried of the centre-left SPO hailing the vote as a “great success for consumers, the environment and animal welfare as well as human rights”, while warning that it would have been bad for climate protection and labour rights in South America.

The Guardian says “concerns about adverse effects on the European product standards and farming sector also played a part in the debate in the Austrian parliament”.

Importers of EU goods in the Mercosur zone currently have to pay tariffs of 35% on cars, 14-20% on machinery and 27% on wine, which would be gradually phased out if a trade deal came to pass.

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However, DW says the cross-party agreement to vote against the trade deal “may also be a way of politicians seeking support from voters, as elections are coming up”.

According to the Krone Zeitung, 78% of Austrians wanted the pact to be thrown out.

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