Farming News - Austria blocks EU-Mercosur trade deal with South America

Austria blocks EU-Mercosur trade deal with South America

23 Sep 2019
Frontdesk / Finance

Austrian lawmakers have rejected the proposal for a free trade pact between the European Union and the Mercosur bloc of four South American countries, in the latest blow to the deal.

Nearly all parties in the Austrian parliament’s European Union subcommittee voted against the draft for a EU-Mercosur free trade agreement late on Wednesday.

That means the government must vote against the deal at the EU level, where according to rules all 28 member states and their parliaments must agree to trade deals.

Brazil and Argentina, along with Uruguay and Paraguay, are the four countries in the Mercosur trade bloc, which in summer agreed one of the world’s biggest trade deals with the European Union after 20 years of negotiations.

Brazil is under pressure from European countries over its environmental policies and an epidemic of forest fires in the Amazon basin.

France blocked the deal in August after Brazilian President Jair Bolsonaro rejected criticism over the wildfires raging through the Amazon. Britain and Germany criticised France’s decision as not being the appropriate answer.

The EU is already Mercosur's biggest trade partner, accounting last year for 20.1% of the bloc's trade in goods such as food, drink, farm products and tobacco. EU exports account for only 2.3% of the European bloc's total and tariffs on EU products are as high as 35% for cars and clothing.