The pact, which will create an integrated market of 780 million consumers and marks the EU’s largest trade deal in decades, was finalized at a meeting of EU ambassadors after Italy, previously a swing vote, decided to back the proposal. The accord, which includes Brazil, Argentina, Paraguay, and Uruguay, is expected to be signed in Asuncion, Paraguay, on January 17, with European Commission President Ursula von der Leyen in attendance.
The EU-Mercosur deal has been in negotiation for more than 25 years, facing concerns over environmental protections, agrifood standards, and fears among European farmers about a flood of agricultural imports. French President Emmanuel Macron and other leaders, including Ireland and Austria, voted against the deal, arguing it could compromise food sovereignty and harm domestic producers. Farmers in France and Poland staged protests in the days leading up to the EU decision, with tractors blockading streets in Paris and demonstrations in Warsaw, Bloomberg photographers reported.
Bloomberg Economics estimates the trade agreement could boost the Mercosur economy by up to 0.7% and Europe’s by 0.1%, while also strengthening the EU’s geopolitical influence in a region where China has become a dominant industrial and commodities partner. German Chancellor Friedrich Merz hailed the deal as a “milestone in European trade policy” and a signal of the EU’s strategic autonomy.
The agreement includes safeguards designed to protect European farmers, such as a mechanism to investigate potential tariff suspensions if import volumes rise sharply or prices fall below recent averages. These concessions helped secure Italy’s backing, while France remained firmly opposed, citing outdated negotiation bases and risks to sensitive agricultural sectors.
Analysts say the EU-Mercosur trade deal represents both a major economic opportunity and a political challenge, balancing long-standing protectionist concerns with the bloc’s ambitions to expand global trade influence. Bloomberg notes that final approval still requires a vote by the European Parliament, keeping the deal’s future under close scrutiny.
