The European Union has approved the long-delayed Mercosur free trade agreement. After last-minute concessions to the agricultural lobby, Italy dropped its opposition, paving the way for the creation of a new free trade zone comprising more than 700 million people. While the deal aims to boost trade and industry, it continues to face resistance from farmers and environmental groups.
Source: RT, January 9th, 2025
After more than a quarter-century of difficult negotiations, the EU has cleared the path for one of the largest trade deals in the world. A qualified majority of the 27 member states voted in favor of signing the agreement with the South American Mercosur bloc — Brazil, Argentina, Uruguay, and Paraguay — diplomats confirmed to international news agencies on Friday in Brussels.
The deal will create a free trade area encompassing more than 700 million people and around 20 percent of global trade. For Europe’s export-oriented industries, it represents a strategic breakthrough. For many farmers, however, it is a political shock.
Italy breaks the deadlock
The breakthrough came at the last moment. As recently as a few weeks ago, the deal had been stalled by a blocking minority of EU states. France and Poland had declared their opposition early on, while Italy held out until shortly before the vote, demanding additional guarantees for European farmers.
Rome only agreed to back the accord after the European Commission presented new safeguards and financial support measures for the agricultural sector. With Italy’s approval, the qualified majority needed for adoption was reached, giving the Council the green light for formal signing.
In Brussels, the deal is seen not only as an economic project but also as a geopolitical statement. The EU is deliberately affirming its commitment to open markets at a time when Washington, under President Donald Trump, continues to pursue a protectionist trade policy.
Boost for key industries
The agreement will gradually remove most tariffs and trade barriers between the two blocs. European core industries are expected to benefit the most.
Currently, cars exported to Mercosur countries face import duties of up to 35 percent — tariffs that will be almost entirely eliminated in the coming years. The mechanical engineering, chemical, and pharmaceutical sectors have long pressed for the deal’s conclusion.
According to the European Commission, exports to South America could rise by as much as 39 percent, equivalent to an annual trade increase of around €49 billion. The deal could help secure or create more than 440,000 jobs across Europe.
Farmers caught between protection and mistrust
Agricultural groups remain unconvinced. Farmers in France, Poland, and Austria fear severe price pressure from cheaper South American imports of beef, poultry, sugar, and ethanol. In 2024 alone, the EU imported more than 200,000 tons of beef from Mercosur countries.
To curb discontent, the EU has built in extensive safeguard mechanisms. Sensitive products will be subject to import quotas, strict monitoring, and the option to suspend tariff reductions in case of market disruption. The Commission will also submit progress reports every six months on the impact of imports.
Officials in Brussels emphasize that all EU environmental, animal welfare, and food safety standards will apply to imports from Mercosur nations. Critics, however, doubt these standards can be effectively enforced — particularly regarding deforestation and climate impacts in the Amazon region.
Signing ceremony in Paraguay
The formal signing ceremony is expected to take place in the coming days in Paraguay, which currently holds the Mercosur presidency. European Commission President Ursula von der Leyen and European Council President António Costa will attend on behalf of the EU.
While the agreement still requires formal ratification, the political process is considered complete. What remains is a deep divide — between industry and agriculture, free traders and protectionists. For EU leaders, the deal marks a historic assertion of Europe’s economic independence; for many farmers, it signals the start of a new fight for survival.
