EU fast-tracks trade deal with South America’s Mercosur, to France’s chagrin

The European Union will provisionally apply a contentious free trade agreement with South American bloc Mercosur to ensure it secures first-mover advantage, the European Commission said on Friday, in a move France called a "bad surprise".

The agreement can enter into force provisionally two months after an exchange of notifications with Mercosur members, the Commission said.

The EU normally waits for approval of its free trade agreements by EU governments and the European Parliament. But EU lawmakers, led by French deputies, voted last month to challenge the agreement in the bloc's top court, potentially delaying its full implementation by two years.

Approval by the EU assembly remains ultimately necessary, but the EU and Mercosur can begin reducing tariffs and applying other trade aspects of the agreement before then.

MACRON CALLS MOVE DISRESPECTFUL

France - the EU's largest agricultural producer - has been the most vocal opponent of the Mercosur deal, saying it would sharply increase imports of cheap beef, sugar and poultry and undercut domestic farmers who have staged repeated protests.

"For France, it's a surprise, a bad surprise, and for the European Parliament, it's disrespectful," French President Emmanuel Macron told reporters after meeting Slovenian Prime Minister Robert Golob at the Elysee Palace in Paris.

In a statement, French meat industry association Interbev called on French members of the European Parliament to act to "prevent the Commission from circumventing the democratic debate". 

In a vote in January, 21 EU countries supported the agreement, while Austria, France, Hungary, Ireland and Poland voted against and Belgium abstained.

The EU deal with Argentina, Brazil, Paraguay and Uruguay, concluded in January after some 25 years of negotiations, could remove around 4 billion euros ($4.7 billion) of duties on EU goods exports, making it the bloc's biggest ever free trade agreement in terms of potential tariff reductions.

Germany and other supporters of the deal such as Spain say it is essential to offset business lost due to U.S. tariffs and to reduce reliance on China for critical minerals. 

The German-dominated centre-right European People's Party -- the biggest political group in the European Parliament -- and the European Dairy Association both welcomed the swift application of the agreement.

The Commission's move follows Argentina and Uruguay ratifying the agreement on Thursday, with Brazil and Paraguay expected to follow soon.

"I've said before, when they are ready, we are ready," Commission President Ursula von der Leyen said in a short statement. "On that basis, the Commission will now proceed with provisional application."

($1 = 0.8473 euros)

(Reporting by Philip Blenkinsop, editing by Andrei Khalip)