More than 25 years in the making, the EU’s trade agreement with the Mercosur bloc has come down to a single question: whether Italy is prepared to tip the balance.
Ministers from the member states are set to take a crucial decision on Wednesday on whether to advance the long-delayed accord with Argentina, Brazil, Paraguay and Uruguay. The agreement, designed to deepen trade ties between the EU and South America, requires a qualified majority to pass, but a handful of governments such as those in France, Poland or even a new administration in Czechia, staunchly oppose the deal, with farmers and the strong farming lobby worried the market would be flooded with cheaper beef and sugar and other agrifood held to less strict safety standards than in the 27-member bloc.
Representatives have signalled they may push for stricter safeguards or a blocking minority. Germany and Spain have consistently supported the pact, citing benefits for industrial exports and broader strategic trade diversification.
Sweetening the deal
Formally the meeting on Wednesday was touted as a strategic discussion on the Common Agricultural Policy or CAP and Mercosur was not on the official agenda. But it is expected to dominate both corridor conversations and side meetings ahead of Friday’s vote that could cement the deal. Pre-empting talks, in the hopes of swaying powerhouse Italy which could decide in favour, European Commission pledged an additional €45bn being frontloaded and locked in for farmers even before tough negotiations on the future EU budget begin.
At its core, the deal aims to trade greater access to South American markets for European manufacturers — particularly in cars, machinery and chemicals — in exchange for wider entry for Mercosur countries into the EU’s agricultural market. That balance has long divided member states, with industrial exporters generally in favour and farming-heavy nations concerned about competition and safeguards.
You might be interested
Will Italy come around?
Italy has emerged as the potential swing vote. Its position has been under close scrutiny since December, when reluctance from Rome forced the postponement of a planned signing trip. The €45 billion “locked in” for farmers early was welcomed by Italian Prime Minister Giorgia Meloni, and could be the last tumbler to fall in place, providing a tangible assurance to domestic constituencies while leaving the overall post-2027 farm budget unchanged. The move is designed to give Rome both a political win and practical leverage to present to farming stakeholders.
Italian officials have welcomed the measure as a constructive development in broader budget discussions, without publicly committing to support the Mercosur vote. Allies of Prime Minister Giorgia Meloni suggest negotiations are moving in the right direction, but no final position has been confirmed. Rome must balance the demands of powerful farm lobbies with the interests of Italian industrial exporters and high-end food and wine producers who stand to benefit from improved South American market access.
Wild cards
Smaller and mid-sized member states remain potential wildcards. Diplomats caution that shifts in their positions could narrow any majority, even if Italy comes on board. This week’s ministerial discussions are expected to focus less on technical amendments and more on testing red lines.
The outcome remains finely balanced. A second failure to assemble a qualified majority would mark another setback for a deal, decades in the making, frustrating pro-trade governments and manufacturers. Success, by contrast, would reflect a combination of incremental assurances, backroom negotiations and the decisive influence of Italy’s vote.
Whether those assurances are sufficient will become clear when ministers leave the meeting rooms and the numbers are counted.
This is a developing story.
