Wang Shuo: The obstruction of the new free trade agreement sounds the alarm for the European Union

The European Parliament recently passed a motion to submit the EU Mercosur Free Trade Agreement to the European Court of Justice for review with 334 votes in favor, 324 votes against, and 11 abstentions. This move may slow down the approval process of the free trade agreement and increase uncertainty about its entry into force. This is not just a setback in the process of implementing a trade agreement, but a manifestation of the escalation of internal conflicts and differences within the EU to a systemic crisis in European governance, which not only stems from the power game between member states and the EU, but also includes the intensification of political fragmentation and populism. In other words, this is also the dilemma and confusion that the EU has shown when facing internal and external difficulties.

It should be said that this 25 year long free trade agreement is generally beneficial for the European Union. One is to help strengthen market diversification and economic resilience. If the agreement comes into effect, EU exports to South America are expected to increase significantly and save the EU about 4 billion euros in tariffs - a figure that may gradually increase in the years after the agreement takes effect. Secondly, it helps to strengthen the guarantee of key raw materials. South America accounts for 50% of global lithium reserves and 30% of nickel reserves, and can become the core support of the "European Green Deal" to ensure the stability of the EU battery and electric vehicle supply chains. Thirdly, it helps to strengthen strategic autonomy. The EU is hostile to Russia because of the Russia-Ukraine conflict, and also faces "extreme pressure" from the United States. It needs to expand cooperation with the South American market, so as to eliminate risks to a certain extent. Of course, the countries of the Southern Common City will also benefit greatly from it, which can effectively enhance investment, exports, employment, and even technological and industrial upgrading.

The delay in implementing such a mutually beneficial free trade agreement is largely due to problems within the European Union itself. Firstly, there are issues with the EU's interest distribution mechanism. The EU is a highly integrated international organization, where member states relinquish some sovereignty to the EU and gain certain benefits. When integration is in a low political dimension or when the benefits outweigh the costs, member countries are more willing to move towards cooperation; When integration is at a higher political level or when costs outweigh benefits, member countries tend to act independently. That is to say, member states can choose whether to cooperate with EU policies based on their own interests and needs. After all, whether it is an alliance or a federation, it cannot last long without sufficient common interests. The EU has not been able to solve this problem well, and instead, as the differences among member states continue to widen, decision-making efficiency is further reduced. In terms of this free trade agreement, manufacturing countries like Germany are clearly pleased with its success, while countries like France and Poland will strongly resist it to protect their own agriculture.

Secondly, there are issues with the internal political ecology in Europe. In recent years, the European economy has been continuously in a slump, with high fiscal deficits and debt levels, increasing living costs and dissatisfaction among the people, and society increasingly falling into turmoil and fragmentation. On the one hand, this has led to an increasingly diverse political spectrum within the EU, with numerous political parties and difficulty in reaching consensus; On the other hand, it has led to an increase in extremist sentiment and the rise of populist parties. Faced with an increasingly divided society, both mainstream political parties and populist parties are polarizing their political views for survival needs, and even forming a vicious cycle of "populist party mainstreaming, mainstream party populism" to some extent, placing the interests of the country and the people second or even ignoring them. For example, the far right French political party, the National Union, defected in the European Parliament vote, calling the EU Mercosur Free Trade Agreement a "trap that sacrifices French farmers"; As the mainstream political party, the German Green Party is putting pressure on "insufficient environmental protection provisions". When parties engage in infighting for their own interests, the EU, as a "gatekeeper," has clearly failed to play its role well.

Thirdly, there are issues with the EU's own strategic positioning. Currently, the United States is attempting to "rewrite" rules through its power, and if the European Union cannot establish a pivot in supply chains, markets, rules, and other aspects, it may eventually become a pawn in geopolitical games. If the free trade agreement can come into effect, it will provide the EU with a new pivot for strategic autonomy. But the problem is that the EU is still hesitant about its own positioning, unwilling to give up unrealistic illusions about the United States, relying on so-called transatlantic ism, and at the same time difficult to truly adjust its mentality, treat Latin American countries with an equal attitude, and adhere to pragmatic cooperation that seeks common ground while reserving differences. So, on the one hand, the EU has endured the "maximum pressure" from the United States, while on the other hand, it has been dragging its feet in cooperation with the Southern Common Market, imposing "values diplomacy" on external agreements. This is seen as exposing the hypocrisy of its "normative power" and further demonstrating the vague and wavering strategic positioning of itself.

In summary, this trade agreement is not optional for the EU, but a practical necessity for survival, only facing resistance due to some of the EU's own problems. The current suspension of trade agreements can be said to be temporary, but it does sound the alarm for the EU's current governance model. If the EU does not make a firm decision to reform, it may fall into a vicious cycle of "decision-making paralysis - trust collapse - member state centrifugal", its international credibility and influence will also decline, and it may ultimately lose its initiative in international changes. Of course, we should also recognize that the process of European integration is often driven by crises. For the EU, perhaps only courage and action are the true ways to break through. (The author is a professor at the School of International Relations, Beijing Foreign Studies University)