The European Commission is multiplying concessions for European farmers in an effort to put a date on the Mercosur trade deal signature with Latin America.
From unlocking cash to relaxing regulation, the Commission is catering to demands of heavyweight holdouts, Italy and France, which have pushed a list of demands before they commit to the Mercosur. Rome is signaling it is open to signing it soon, while Paris remains cautious ahead of a week of planned protests from French farmers.
On Wednesday, the Commission agreed to suspend the EU carbon border tax on fertilisers retroactively starting January 1, as demanded by the two countries and in line with requests from farmers who suggested it would put them at a disadvantage over production costs.
The announcement came a day after the Commission also agreed to unlock early funding for farmers, in line with Italian demands.
“Farmers concerns are not an afterthought in our trade policy,” EU Trade Commissioner Maroš Šefčovič said after the announcement, adding: “They are central” to Europe.
French and Italian officials are concerned that their country’s agricultural sector would be exposed to a “significant increase” in the cost of fertilisers imported into the EU, with the prices estimated to rise by around 25% due to the new taxes.
A letter from Commission President Ursula von der Leyen on Tuesday promised farmers access to €45 billion from the Common Agricultural Policy (CAP) budget as soon as 2028.
“For Italy, this means having more resources for agriculture in the next seven-year budget, compared to the current one,” Italy’s Agriculture Minister Francesco Lollobrigida told reporters on Wednesday.
Giorgia Meloni holds the key to seal the Mercosur deal
The latest Commission’s decisions persuaded Italy to back the trade deal.
Rome’s position is crucial, as the deal requires a qualified majority of member states to be approved, and a delay asked by Prime Minister Giorgia Meloni last December derailed the sign-off foreseen for the end of the year.
Now the conditions seem adequate, Lollobrigida suggested on Wednesday, before the meeting with his fellow Agriculture Ministers.
“If the Commission certifies its commitments, Italy will support the deal”, he told reporters. In theory, that would facilitate its signature, which countries like Germany and Spain are looking to certify in legally binding ways as soon as this month.
With Italy signaling an agreement, France remains the biggest holdout. Even as the Commission pushes to deliver the deal, diplomats concede it cannot be forced on the French government without a political narrative that could allow them to back it.
The French government led by Emmanuel Macron faces a deep agricultural crisis that could flare with protests in Paris on Thursday, just as the Cyprus presidency of the EU is considering to schedule a vote on the deal in Brussels on Friday.
On Wednesday, in a further effort to appease farmers, France suspended imports of agricultural products containing residues of pesticides banned in the EU.
The measure still requires the Commission’s green light.
