EU delays massive free-trade deal with South American bloc Mercosur

Brussels – A massive free-trade agreement between the European Union and the Mercosur bloc of South American nations has been postponed. The delay comes after significant opposition from European farmers, as well as last-minute resistance from France and Italy, threatened to derail the deal. Supporters had hoped the agreement would be a crucial geopolitical win for both continents.

EU officials had aimed to sign the agreement in Brazil this weekend, following 26 years of negotiations. That said, the reality is a bit more complicated. European Commission spokesperson Paula Pinho confirmed that the signing is now scheduled for January.

Experts suggest this delay could harm the EU's global negotiating position as it seeks new trade partnerships amid ongoing commercial tensions with both the United States and China. Once ratified, the trade agreement would encompass a market of 780 million people, representing a quarter of the world's gross domestic product. It would also progressively eliminate duties on almost all goods traded between the two blocs.

French farmers' unions, who fear the deal would negatively impact their livelihoods, welcomed the postponement. France has been a leading opponent of the agreement between the EU and the five active Mercosur countries: Brazil, Argentina, Uruguay, Paraguay, and Bolivia. Italy voiced new reservations on Wednesday.

The agreement to delay the signing was reached on Thursday between European Commission President Ursula von der Leyen and European Council President Antonio Costa. The discussion occurred during an EU summit with Italian Premier Giorgia Meloni. An EU official stated that Italy's vote in favor of the agreement in January was a condition of the agreement.

The decision to postpone came just hours after farmers in Brussels blocked roads with tractors and set off fireworks in protest of the trade deal. Police responded with tear gas and water cannons.

Farmers threw potatoes and eggs during the confrontation with police. Protesters also burned tires and a mock wooden coffin labeled "Agriculture," creating a large black cloud mixed with white tear gas. The European Parliament evacuated some staff due to the damage caused by the protests.

"We are fighting to defend our jobs," stated Armand Chevron, a 23-year-old French farmer.

Hundreds of farmers, including Pierre Vromann, 60, arrived on tractors and used them to block roads around key EU institutions.

Vromann, a cattle and grain farmer from Waterloo, Belgium, stated that the Mercosur deal would be "bad for farmers, bad for consumers, bad for citizens and bad for Europe."

Farmers traveled from as far away as Spain and Poland to participate in the protests.

French President Emmanuel Macron, arriving for Thursday's EU summit, maintained his opposition to the Mercosur deal, advocating for further concessions and additional discussions in January. He mentioned having discussed delaying the deal with colleagues from Italy, Poland, Belgium, Austria, and Ireland, among others.

"Farmers already face an enormous amount of challenges," he said, referencing ongoing farmer protests over the trade deal and a cattle disease impacting regions around France. "We cannot sacrifice them to this accord."

Macron's government, facing a rising far-right that criticizes the deal, has demanded safeguards to monitor and prevent significant economic disruption in the EU, increased regulations in Mercosur nations (such as pesticide restrictions), and more inspections of imports at EU ports.

Italian Premier Giorgia Meloni told the Italian Parliament on Wednesday that signing the agreement in the coming days "would be premature."

"This doesn't mean that Italy intends to block or oppose (the deal), but that it intends to approve the agreement only when it includes adequate reciprocal guarantees for our agricultural sector," Meloni said.

Von der Leyen remains committed to signing the agreement but requires the support of at least two-thirds of EU nations. Italy's opposition would give France enough votes to veto the signature.

In Greece, farmers have been blockading highways for weeks, protesting delays in agricultural subsidy payments, high production costs, and low product prices.

While supporters argue that the EU-Mercosur deal would provide an alternative to export controls from Beijing and tariffs from Washington, critics contend that it would undermine both environmental regulations and the EU’s agricultural sector.

German Chancellor Friedrich Merz stated before the Brussels summit that delaying or scrapping the deal would damage the EU's global standing.

"If the European Union wants to remain credible in global trade policy, then decisions must be made now," Merz said.

The deal also reflects strategic competition between Western nations and China in Latin America, according to Agathe Demarais, a senior fellow at the European Council on Foreign Relations. She said that failing to sign the EU-Mercosur free trade agreement risks pushing Latin American economies closer to China.

The political tensions within Mercosur in recent years, particularly between Argentina’s President Javier Milei and Brazil’s President Luiz Inácio Lula da Silva, have not deterred South American leaders from pursuing an alliance with Europe to benefit their agricultural sectors.

Lula has been a strong advocate for the agreement, hoping to finalize it and achieve a significant diplomatic victory ahead of next year’s general elections. He expressed surprise at Italy’s hesitancy and discussed it directly with Meloni.

At a Cabinet meeting on Wednesday, Lula expressed frustration with the positions of Italy and France.

"If we don’t do it now, Brazil won’t make any more agreements while I’m president," Lula said, adding that the agreement would "defend multilateralism" as Trump pursues unilateralism.

Milei also supports the deal.

"We must stop thinking of Mercosur as a shield that protects us from the world and start thinking of it as a spear that allows us to effectively penetrate global markets," he said.