The European wine industry is strongly advocating for the immediate initiation of the adoption and ratification process of the trade agreement between the European Union (EU) and Mercosur (Southern Common Market). The European Committee of Wine Companies (CEEV) emphasized in a June 27 announcement that, in a stagnating global wine consumption market, this agreement will play a crucial role in diversifying European wine exports and opening up new markets.
Marcia Barbaglione, President of CEEV, stressed that "the global wine industry faces significant challenges from long-term consumption decline," and underscored that attracting new consumers, particularly in emerging markets like Brazil, is essential for long-term economic sustainability.
Ignacio Sánchez Recarte, Secretary General of CEEV, stated that the current 27% wine tariff imposed on Brazil hinders the competitiveness of European companies, but that this tariff would be abolished upon the agreement's conclusion, significantly improving the accessibility of European wines. As of 2024, Brazil represents a €206 million market, accounting for approximately 1% of EU wine exports. CEEV also expects the agreement to contribute to simplifying import procedures and protecting European geographical indications, in addition to tariff reductions.
However, some European countries, primarily France, are strongly opposing this agreement and are moving to block its ratification. France is concerned that its domestic agricultural sector, especially the beef and poultry industries, will face unfair competition from cheaper agricultural imports from South America. The main reasons for opposition include the negative impact that lower production costs and relatively relaxed environmental and hygiene regulations in South American countries could have on European agriculture. Furthermore, deforestation issues in the Brazilian Amazon are also a major reason for France's opposition.
The ratification process of the agreement is complex. Although both sides reached a political agreement on December 6, 2024, legal review, translation, and ratification by the parliaments of each country remain before official signing and entry into force. If it's categorized as an "EU-only agreement" covering only trade aspects, a qualified majority approval from EU trade ministers (support from 15 member states and 65% of the EU population) would suffice. However, if it's classified as a "mixed agreement" encompassing broader content like investment protection, ratification by the parliaments of all 27 member states would be required, potentially delaying the process significantly.
France, along with Poland, Austria, and Ireland, is attempting to form a "blocking minority" to stop the agreement. This would require at least four member states to oppose it, with the combined population of these countries exceeding 35% of the total EU population. Italy is also in a situation where its business interests and agricultural concerns are in conflict internally, and it has not yet taken a firm stance.
The European wine industry is seeking new avenues through the Mercosur agreement, but its outcome remains to be seen as it faces opposition from agricultural powerhouses including France. The final ratification of this agreement is expected to have a significant impact on the future direction of the European Union's trade policy and internal cohesion.
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