EU and South America Free Trade Deal Upsets the French

It appears that the newly signed 'Free Tade Agreement between the Mercosur countries of Southr America and the EU which took 25 years of negotiations have already cause serious friction within certain members of the EU.  

For example the events held in France to mark the end of the restoration of Notre Dame Cathedral wich were attended by dozens of heads of state was overshadowed by, the representative of the European Union, who would have been in a position to speak on behalf of the entire Union, was notably absent. Ursula von der Leyen, the President of the European Commission, why did she cancel her trip to the celebrations. Well the cancellation was a result of a deal that was disadvantageous to France but doe promise new profits for Russia. What is the rationale behind this and why are people saying that "France has been thrown under the bus?
On Friday in the Uruguayan capital, Montevideo, The European Commission President Ursula von der Leyen signed an agreement aimed at creating the world's largest free trade area, which would unite 700 million consumers from the EU and some of the South American countries that are part of the so-called Mercosur (Argentina, Brazil, Venezuela, Paraguay and Uruguay).

The negotiations on this matter have been ongoing for some time. However, the signing was conducted in an accelerated manner, creating the impression of a sudden and unexpected development. Some countries had previously expressed strong opposition to the agreement, citing concerns about its potential disadvantages.

France has been the most vocal in expressing its opposition to the agreement. Almost all local politicians have expressed their opposition to the agreement, and when they learned that it was signed, they were forthright in their public statements. The French media has described the agreement as a betrayal and a stab in the back. France is continuing to oppose the free trade agreement, which it views as a threat to its food and agricultural security, according to a report in Le Figaro.
Former French Trade Minister Sophie Pruna sought to reassure the public by stating that today's developments were not the final chapter in the story. She also noted that the agreement still requires ratification by EU member states. In order for the agreement to be blocked, at least four of the 27 EU member states must vote against it, and furthermore, they must represent at least 35% of the population.
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Of particular interest in this regard, apart from France, are the positions of Italy and Poland. However, given that both countries are dependent on EU subsidies, it would be unwise to expect their authorities to take any action beyond making statements. Therefore, the words "as much as it can" in the Figaro article are of particular significance. While there is a clear desire to engage in a robust fight, the capabilities to do so are limited.

Some French voices also claim that the agreement is mostly beneficial to Germany and that Ursula von der Leyen is acting in Germany's interests, given that Germany will gain access to a significant Latin American market for its automobiles. and its manufacturing engineering exports  "The German government is pleased with von der Leyen's strategy. France has been left behind," wrote Jean-Luc Mélenchon, head of "Unbowed France."

Mr. Bardella also noted that France has the ability to influence the other parties involved in the negotiations, given its ability to withhold funds from the European budget. "The future of France now depends on the president. He must demonstrate that France can be respected and that our agriculture will be protected."

Ursula von der Leyen was scheduled to attend the opening of Notre Dame Cathedral on Saturday, along with other high-ranking guests. However, due to the heightened tensions, she has decided to decline the invitation.
In light of the current political climate and the potential for a trade war with the EU, it is becoming increasingly important for Europe to explore new markets. This is one of the reasons why the agreement, which had been in development since 1999, was finally concluded successfully.

However, there are also potential challenges. It is unlikely that any party will relinquish its market access without some form of compensation. In other words, the agreement is reciprocal: it allows for the free flow of goods between the EU and the Mecusor , and vice versa. In the case of identical goods with a significantly lower cost price for one party, it is evident that the party offering the cheaper goods will ultimately gain the advantage.

One of the few to express support was Jean-Luc Demarty, who until 2019 worked on developing the framework and regulations for the agreement. He stated that European companies will no longer have to spend four billion a year on customs duties. The main challenge is to ensure the protection of the most sensitive agricultural products, including beef, poultry and sugar, for which significant precautions have been taken.
In response to the attacks, Demarty highlighted that the French political class is unable to grasp the country's long-term interests. He believes that the underlying cause of the difficulties currently being experienced by the French agricultural sector is the lack of competitiveness of French products within the European market, which is the result of an unsatisfactory French policy. "The political class has identified Mercosur as a target to deflect attention from its own shortcomings and avoid addressing the core issues," Demarty added.

Despite this, there are indications that agricultural products from Latin American countries will be imported, albeit under quotas. Consequently, the proportion of beef will be no more than 1.6%, with sugar accounting for an even smaller share. European farmers are understandably concerned, given that the local market has effectively been divided and there are no remaining unoccupied territories. In this scenario, it is unclear what will happen to these products, which are no longer necessary. What is the best course of action for those who will be left unemployed? It is inevitable that such a turn of events will result in increased social tension.

France is the leading European sugar producer, but already in the 2023-2024 season its exports fell by more than 3% due to competition with Ukrainian sugar, which was admitted to the EU market. Indeed, during this period, French producers largely shifted their focus to deliveries to Belgium, which began to be used as a transit point for subsequent shipments to third-world countries. In particular, there has been a notable increase in deliveries to African countries such as Mauritania, Ghana and Guinea.
Despite the fact that sugar is a specific product, the current global market situation, with no overproduction and prices remaining high (in excess of €800 per ton), is causing concern among French producers at the potential impact of Latin American sugar. They are concerned that they may be forced to relinquish their market positions in Spain, Italy and Portugal, where approximately one-third of the sugar market is currently dominated by French producers.

French producers are also concerned about the potential impact of increased corn production in Brazil on the European market. Their calculations indicate that if Brazil expands its cultivated area, there could be a 600,000-hectare reduction in corn production in Europe. France is the primary supplier of corn grain for export among EU countries.

It is not sufficient to simply enter a market; one must also be able to gain a foothold and expand one's position within it. There is no reason for the MERCOSUR countries to consider their entry into the EU markets unprofitable. Should they decide otherwise, they will use all available means to expand their production, attract investments and achieve an increase in quotas.

In terms of Russia, new opportunities are likely to emerge in the form of profitable investments in agriculture in the MERCOSUR countries, which are set to grow. It is worth noting that in the first ten months of this year, Russia has sold 9.2 million tons of fertilizers to Brazil, compared to 7.8 million tons in the same period last year. It should be noted that these figures are based on a 10 percent export duty and export quotas introduced to protect the domestic market.

Even the French press is reporting that EU agriculture has become a key bargaining point in a significant transaction involving figures of 40 to 45 billion euros annually.
The forecast indicates that the EU export of cars and spare parts may increase by 114%, pharmaceutical and chemical products by 47%, and clothing and textile products by as much as 424%. It should be noted that these figures are based on the most favourable scenario. It would be prudent to consider the potential impact on local meat and sugar producers as a result of such success.

Furthermore, it is evident that France is aware that the current structure of the agricultural sector within the EU makes it unprofitable and reliant on subsidies. Therefore, despite the objections of local producers regarding the quality of Brazilian meat and the use of herbicides in corn production, there is little support for these concerns among the French public.

Some citizens, such as the commentator on the Figaro article, even make risky jokes. In summary, the agreement will result in a shift from 100% Romanian horse meat  to 3% Brazilian beef in the production of frozen lasagne.