It took a quarter of a century (a long time for the cows to come home) but the EU-Mercosur trade agreement got a qualified majority in the European Council on Friday. Ahead of the vote, approval was expected to hinge on Italy. The country came aboard after earlier securing extra safeguards and financial support for its farmers.
The news the deal had received provisional backing was reported by Reuters; now confirmed, it will open a new era in European trade. Despite the success, some countries, including France, Poland, Austria, Ireland ad Hungary, did not back the agreement. Capitals had until five pm on Friday to lodge objections before the results of the vote were formalised. The Commission, in its mid-day briefing, refused to comment in any detail.
What the deal does
If the deal goes through, it will link the EU with Argentina, Brazil, Paraguay, and Uruguay, creating a massive combined market of about 780 million people. It is the biggest free-trade agreement the EU has negotiated in terms of tariff reductions and market reach. European manufacturers, especially in cars, machinery, wine, and chemicals, stand to benefit from broader access to South American markets. At the same time, Mercosur countries will get wider entry into the EU agricultural market. That balance has long divided member states: industrial exporters have generally been in favour, while countries with large farming sectors have expressed strong worries about competition or the environment.
Farmers’ concerns
Farmers’ groups across the EU say there is good reason to fear. Cheaper imports of beef, sugar, and other agricultural products could undercut domestic and local producers. They are also worried about differences in sanitary and environmental standards, which might give South American imports an advantage.
Overall, they fear pressure on domestic prices that could hit farm incomes, especially smaller operations already struggling with rising energy and fertiliser costs. Safeguards and monitoring mechanisms are being included to protect sensitive EU agricultural sectors, allowing action if imports threaten local producers.
The run-up
Earlier this week, the Commission attempted to tip the scales in favour if the deal by announcing cuts on some fertiliser import duties and proposing early access to €45bn in EU agricultural funding for 2028–34, so farmers get support sooner rather than later.
Observers have noted that these concessions, while partly symbolic, were meant to reassure farming lobbies and hesitant capitals. Italy had previously delayed its approval, making it the potential swing vote after delaying the process in December.
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What’s next
Crucially, the EU is also preparing for provisional enforcement of the agreement, which would allow parts of the pact to take effect before formal ratification by all member states and Mercosur countries.
Ursula von der Leyen is then reportedly planning to travel to Paraguay next week, on 12 January, to sign the agreement, reflecting the Commission’s intent to move quickly once the Council vote is complete. That schedule has not been officially confirmed.
Not all hunky dory
France, however, has become a flashpoint. Farmers from central regions have protested, now all the way to Paris. Politically, tensions are high: while French Agriculture Minister Annie Genevard opposed the deal, opposition parties have threatened to challenge the future of the government over its handling of the pact.
Even with a qualified majority, the deal is not yet legally in force. It will still require ratification by the European Parliament and approval in Mercosur member states before full implementation begins.
Once in place, it will affect millions of farmers, industrial exporters, and consumers across Europe and South America, representing both a major strategic opportunity and for some, a source of continuing controversy.
