EU delays free-trade deal with Mercosur, Commission says

The European Union is delaying a major free trade agreement with South American countries due to protests from farmers and last-minute objections from France and Italy, the European Commission announced on Thursday. Although officials had hoped to sign the EU-Mercosur deal in Brazil this weekend after 26 years of negotiations, it has now been postponed until January.

Experts warn that this delay could damage the EU’s credibility in global trade, particularly amid tensions with the US and China. The agreement seeks to gradually eliminate tariffs on nearly all goods traded between the regions over 15 years.

France has led the opposition to the deal involving Brazil, Argentina, Uruguay, Paraguay, and Bolivia, while Italy has expressed new concerns. The decision to defer the signing was made during an EU summit, contingent upon Italy’s support in January.

Farmers’ protests in Brussels

Protests in Brussels included farmers blocking roads and setting off fireworks, leading police to use tear gas and water cannons. Farmers fear the deal may threaten their livelihoods and contribute to rising far-right support.

Farmers protested outside the European Parliament, bringing potatoes, eggs, sausages, and beer. They clashed with police in riot gear, leading to evacuations due to damage caused by the protesters. Some farmers burned tyres and a mock wooden coffin labelled “Agriculture,” producing thick smoke mixed with tear gas.

Farmers express their concern that the Mercosur trade deal would be detrimental to agriculture and consumers in Europe.

More reservations about the deal among leaders

French President Emmanuel Macron is firmly opposing the Mercosur deal as he arrives for Thursday’s EU summit, calling for more concessions and discussions in January. He is in talks with officials from Italy, Poland, Belgium, Austria, and Ireland to delay the agreement due to challenges faced by farmers currently protesting in France.  

Macron’s government is demanding safeguards to prevent economic disruption in the EU, stricter regulations in Mercosur countries, and more inspections of imports.  

Italian Premier Giorgia Meloni stated that signing the deal soon would be “premature” and emphasised the need for adequate guarantees for Italy’s agricultural sector before approval.  

European Commission President Ursula von der Leyen aims to sign the agreement but requires support from at least two-thirds of EU member states; Italy’s opposition could give France enough votes to veto it. In Greece, farmers have set up roadblocks to protest delays in subsidy payments and rising production costs that threaten their livelihoods. However, these protests are not directly linked to the EU-Mercosur agreement.

A clear alternative to China and the US

The agreement, under negotiation for 25 years, aims to cover a market of 780 million people and represent a quarter of the world’s GDP. Supporters believe it offers an alternative to Beijing’s export controls and Washington’s tariffs, while critics warn it may weaken environmental regulations and threaten the EU’s agricultural sector.

German Chancellor Friedrich Merz stated that delaying or cancelling the deal would diminish the EU’s global standing, emphasising the need for prompt decisions. Agathe Demarais from the European Council on Foreign Relations noted that failing to sign the EU-Mercosur free trade agreement could push Latin American economies closer to China.

South American leaders wish the agreement

Political tensions within Mercosur have been evident between Argentina’s far-right President, Javier Milei, and Brazil’s centre-left President, Luiz Inácio Lula da Silva. Despite this, South American leaders are pursuing an alliance with Europe to enhance their agricultural sectors, with Lula being a strong advocate for the agreement, viewing it as crucial for his reelection campaign next year.

Lula expressed frustration at Italy’s hesitation, having discussed it with Prime Minister Giorgia Meloni. He believes the deal will support multilateralism against Trump’s unilateralism.

This article used information from The Associated Press.