The European Union’s planned Mercosur trade deal with four Latin American countries appeared at risk of another delay or possibly collapse on Wednesday, a day before leaders were due to discuss it at a year-end summit in Brussels.
German Chancellor Friedrich Merz appealed to leaders to finalize the agreement, but French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni both expressed hesitation in speeches to their national parliaments.
As one of the groups most opposed to the planned agreement, French farmers protested across the country, including outside the European Parliament in Strasbourg.
Meanwhile, across the Atlantic in Brazil, President Luiz Inácio “Lula” da Silva threatened to renegotiate it during his term if the agreement was not finalized as planned this year.
What is the EU-MERCOSUR trade agreement?
The agreement will enable free trade in a number of sectors between EU members and the four largest members of Mercosur. -Argentina, Brazil, Paraguay and Uruguay. It was finalized in late 2024 after 25 years of negotiations.
A parallel agreement involving four non-EU members that form part of the European Free Trade Area (EFTA) has also been signed and is pending ratification.
The deal will allow the EU to export more vehicles, machinery, wines and spirits to Latin America, while facilitating the entry of South American beef, sugar, rice, honey and soybeans into Europe.
Advocates such as Germany, Spain and Nordic countries argue it would help exports hit by US tariffs under Donald Trump and reduce dependence on China by facilitating easier access to minerals from Latin America.
Italy, France and Poland are among the countries that have expressed the most reservations about the proposal, with resistance particularly evident among farmers, who say easier imports into Europe could threaten their livelihoods.
European Commission President Ursula von der Leyen was expected to visit Brazil later this week to ratify the deal, but she will need permission from leaders of EU member states to do so.
Opposition from at least four European leaders, who represent at least 35% of the bloc’s population, would be enough to thwart the deal.
Merz calls signoff a test of EU’s ‘ability to act’
Chancellor Friedrich Merz told the Bundestag, the lower house of the German parliament, in Berlin that the deal would prove a way to “strengthen the EU’s single market.”
He also noted the long-running efforts to reach an agreement, which began before the euro currency came into circulation and before the 9/11 terrorist attacks on the United States.
“The EU’s ability to act is also measured by whether, after 26 years of negotiations, we are finally in a position to conclude this agreement,” Merz said.
Amid growing pressure for changes to the agreement, in its latest iteration in 2024, Merz warned that European leaders “making losses” on the finer points of the agreement risk missing the bigger picture.
Macron, Meloni say it would be ‘premature’ to sign now
Italy, France and Poland are among the countries that have expressed the most reservations about the proposal, with resistance particularly evident among farmers, who say easier imports into Europe could threaten their livelihoods.
“If the European authorities have made up their minds to force it, France will oppose it very strongly,” French President Emmanuel Macron told a cabinet meeting in Paris, amid large nationwide protests by French farmers, according to government spokeswoman Maud Bregon.
“Nobody would understand that chemically treated vegetables, beef and chicken would arrive on our soil with products banned in France,” Bregon told a news briefing.
Italian Prime Minister Giorgia Meloni raised the issue in comments to parliament on Wednesday before departing for Brussels.
Meloni said, “The Italian government has always been clear in saying that the agreement should be beneficial for all sectors and therefore it is necessary to specifically address the concerns of our farmers.” He said it would be “premature” to finalize a deal without further measures to protect the agricultural sector.
Lula says Brazil will not make any other offers during his tenure
In Brazil, President Luiz Inácio Lula da Silva warned that if the deal and the planned signing ceremony in Foz do Iguaçu failed, he would not be willing to renegotiate the terms at a later date.
“It is difficult because Italy and France do not want to move forward because of internal political problems,” Lula said at his last scheduled cabinet meeting of the year. “I have already warned them: If we don’t do this now, Brazil will not make any more agreements while I am president.”
Lula said Brazil and Mercosur had worked hard to get the agreement accepted and “sent a message at a time when you have an American president who is trying to undermine multilateralism.”
He argued that the deal was “more favorable to them than to us.”
He said he would go to Foz do Iguaçu, near a series of waterfalls on Brazil’s southern border with Argentina, for the anticipated signing, “in the hope that they would say yes.”
“But, even if they say no, we will be tough with them going forward, because we have done everything that diplomacy can reasonably accept,” he said.
Edited by: Dmytro Lyubenko