It is a fact that the early elections in Spain will condition the presidency of the EU Council during the second half of the year. However, beyond the unknowns that arise after the announcement, there is a key point on which Spanish management may be crucial. The Association Agreement between the European Union and the Mercosur countries – Argentina, Brazil, Paraguay and Uruguay – remains unconfirmed. The text, trapped in the bureaucratic machinery of Brussels for the last four years, awaits the right political moment to advance its ratification process. With this, Europe is playing not only its economic leadership, undermined by the advance of China, but also its political influence, in a region of great strategic importance. For Spain alone, the agreement would mean an increase of 0.23% of GDP and the creation of thousands of jobs. Negotiations on the Association Agreement ended in 2019. Since then the world has changed substantially, but the current situation is much more favorable for ratification than in previous years. At the geopolitical level, the Russian invasion of Ukraine has forced a review of European trade ties and the decoupling of the Russian economy. At the political level, the Brazilian administration of President Bolsonaro, at odds with most European governments, has given way to the government of Lula da Silva, whose social and environmental objectives are closely aligned with those of Europe. Domestically, there have also been changes that favour the activation of the agreement. The EU has implemented trade regulations for environmental, labour and human rights standards that apply unilaterally to all imported products. In light of sustainability and human rights objectives, barriers such as the carbon border adjustment mechanism, the regulation banning products made with forced labour, the directive on due diligence in matters of sustainability or the regulation against deforestation, reduce the pressure on the pact with Mercosur. These measures also allow for a rapid and effective response to possible external abuses or non-compliance. What is missing then for a signature that benefits both protagonists? It is, above all, a question of political will. And this is where Spain, beyond its parliamentary composition, can contribute. Both the EU and Mercosur must assume that the changes that have occurred since the end of the negotiations are part of the new context that frames the relations between the two regions. This is the challenge, and main objective, of the document currently being negotiated: the Additional Protocol to the Association Agreement, the text whose approval will allow ratification to be unblocked. This protocol must recognize that the new European trade regulations are part of the Community acquis and focus on ensuring their proper implementation by Mercosur companies. Likewise, the document must incorporate the contribution to the fight against climate change and the protection of biodiversity in South American countries, as a significant part of its political action. This is the case of Brazil, which dedicates more than 52 million hectares – similar to the surface area of Spain – to low-emission agricultural production and where 48% of energy comes from renewables, more than double that of the EU. Approval of the agreement will not be easy. From the environmental side, pressure continues to be exerted to introduce greater commitments. On the other hand, commercial and industrial sectors that consider that the agreement threatens their economic activity due to increased competition are against it. Given these arguments, it is worth highlighting that the Association Agreement offers the two regions mechanisms to reduce their commercial dependence and to promote the complementarity of their economies in the energy transition. In addition, it establishes an institutional framework that allows the geopolitical visions and climate policies of both sides to be aligned. It is an agreement that unites and strengthens the two regions. As the fourth largest economy in the European Union, and one of the main beneficiaries of this alliance, Spain must exercise the leadership offered by the presidency of the EU Council. Achieving approval of the Association Agreement between the EU and Mercosur presents a historic opportunity, not only for economic integration, but also to establish a continuous political dialogue, as necessary as it is strategic, between the countries of both groups. Óscar Guinea is an economist at the European Centre for International Political Economy and Isabel Pérez del Puerto is a journalist. Follow all the information on Economy and Business on Facebook and Twitter. Twitteror in our weekly newsletter
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