European Commission President Ursula von der Leyen has announced the completion of a landmark free-trade agreement with the Mercosur bloc, which includes Brazil, Argentina, Uruguay, Paraguay, and Bolivia. Finalized during a summit in Montevideo, the deal has been 25 years in the making and will establish a trade zone encompassing 700 million people. It aims to strengthen ties between the EU and South America amid growing global trade tensions.
Von der Leyen emphasized the agreement's dual significance as both an economic opportunity and a political necessity, particularly in countering rising protectionism worldwide. Germany has welcomed the deal as a critical boost for its struggling export sector, with the Federation of German Industry calling it a vital growth driver for Europe. Conversely, France has voiced strong opposition, citing concerns over cheap agricultural imports like poultry and beef, which could harm its farmers. French Junior Trade Minister Sophie Primas has pledged to rally opposition within the EU to block its ratification.
The announcement has added to political tensions in France, where the government collapsed just hours before the deal was unveiled. President Emmanuel Macron is under pressure to build an anti-Mercosur coalition, potentially including Poland, Austria, and Ireland. Meanwhile, Italy remains undecided. Prime Minister Giorgia Meloni has indicated her government would require assurances to protect the agricultural sector, with Italy’s stance possibly being decisive in blocking the agreement.
The path to ratification involves several steps, including the publication and review of the final text next week, followed by legal and translation processes that could take months. Brussels may choose to separate the trade and political cooperation aspects of the agreement, allowing the trade component to be ratified without unanimity among EU member states. However, the political pillar would still require approval from national parliaments, potentially delaying full implementation for years.
Supporters argue that the deal will strengthen EU-Mercosur ties and provide economic benefits across both regions. Critics warn that it could deepen inequities in the agricultural sector and create divisions among EU member states.
