As elections approach, France relegates its open trade policy to the EU

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BRUSSELS, Feb 8 (Reuters) – France, facing a presidential election just weeks away, has halted moves to approve an EU trade deal with Mexico that would allow the import of 20,000 tonnes of beef and wants make it harder to access the bloc’s markets, diplomats say.

The European Union’s second-largest economy runs a consistent overall trade surplus with non-EU countries and its companies benefit from reduced tariffs from trade deals, but farmers’ sensitivity to beef imports in particular makes trade politically explosive.

A new trade pact could spark agricultural protests or fuel anti-globalization rhetoric from far-right opponents, hampering President Emmanuel Macron’s planned re-election bid in April and legislative elections in June.

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Interbev, the French meat federation, has urged Macron to oppose the deal and block ongoing negotiations that could lead to new “ultra-competitive” meat imports from Australia, Nova Scotia. Zeeland or the Mercosur block, comprising Argentina, Brazil, Paraguay and Uruguay. .

Ideally, France holds the bloc’s rotating presidency for the first half of the year, giving it the opportunity to lead EU policy.

One trade deal that would normally have been submitted to EU governments for approval is an update to an existing deal with Mexico, signed in 2020, which would allow the import of 20,000 tonnes of beef.

Trade talks have indeed been suspended with Australia after French fury over a canceled submarine contract. France has also suspended the conclusion of negotiations to modernize its trade agreement with Chile, according to diplomats and EU officials.

“The (EU) Commission has accepted, due to the importance of the elections and the sensitivities around trade and globalisation, that nothing will pass. It’s frustrating. We can complain, but it’s like this,” said an EU diplomat.

A French government spokesman said it was not France that was holding up trade deals.

Commerce Minister Franck Riester says Chile has a new president, who won’t start until March and whose administration will have to work with the Commission to finalize a deal. The Mexican deal is in the hands of the Commission, he said.

A BREAK OR A HARMFUL DELAY?

Paris is not without allies. Some EU countries, with important agricultural sectors to protect, discreetly support Paris. Many European lawmakers are also in favor of greater reciprocity and more trade based on European values.

“There are more than French fingerprints on this commercial paralysis,” said a senior EU diplomat.

Some diplomats and trade experts believe it is just a pause given that the next holders of the EU’s rotating presidency are the more free-trade-minded Czech Republic and Sweden.

Others say it undermines the bloc’s credibility among trading partners, who spend years negotiating deals with the Commission, only to find it takes years longer to be sold to lawmakers and governments in the EU.

There is also a question of timing, in terms of leaders, domestic politics and the electoral cycle.

“The question is whether the stars are aligned. For the EU agreements with Japan and Vietnam, they were aligned, but it may not have happened again,” said Hosuk Lee-Makiyama, director of trade think tank ECIPE.

COMMERCIAL DEFENSE

On the other hand, France is enthusiastic about the idea of ​​more protective trade measures.

He wants an agreement by early March on legislation to limit foreign bidders for EU public contracts if their own countries do not reciprocate.

It also remains attentive to the revision of the conditions for concluding a free trade agreement with Europe.

The latter focuses on environmental and labor standards that the bloc insists its free trade partner must meet. France, however, raised eyebrows when it spoke of the need for “mirror clauses”.

Riester says such clauses already exist in bans on growth hormones in meat or plans to limit trade in products linked to deforestation. Other EU members fear going much further, deterring potential partners who need to reflect EU working practices without the EU committing to reflect theirs.

Bernd Lange, the influential head of the European Parliament’s trade committee, said the EU was learning, along with other economies, that trade policy needed to take workers and the environment more into account.

“The old-fashioned theory of trade based on Ricardo and Smith, that you just remove trade restrictions and growth will come, benefiting everyone, is dead wrong,” he said.

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Reporting by Philip Blenkinsop; additional reporting by John Chalmers in Brussels and Leigh Thomas in Paris; edited by Mark John and Nick Macfie

Our standards: The Thomson Reuters Trust Principles.

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