EU-Mercosur Deal Stalls: France Blocks, Germany Pushes

As President Luiz Inácio Lula da Silva heads to Uruguay for the Mercosur/Mercosul summit, the long-awaited trade deal with the European Union hangs in the balance.

The Brazilian leader has been pushing for the agreement’s finalization this year, but hurdles remain. Negotiations have seen “important advances,” according to Maurício Lyrio, Brazil’s Secretary for Economic Affairs.

However, the path from talks to signatures is long and winding. Translation into 23 languages alone could take months. France stands as the main opponent, fearing agricultural imports might harm its farming sector.

French lawmakers have even labeled South American food products as “junk” and “carcinogenic.” This protectionist stance has gained support from Poland.

On the other side, Germany and Spain lead a coalition of 11 EU states favoring the deal. They seek new trade routes to reduce dependence on China and shield members from potential U.S. tariffs under a Trump presidency.

EU-Mercosur Trade Deal

The agreement initially reached in 2019, stalled due to EU demands on deforestation and climate change. Some officials worry history might repeat itself, even if a final text is agreed upon this week.

Argentina’s new president, Javier Milei, adds another layer of complexity. The libertarian leader has hinted at leaving Mercosul unless allowed to pursue bilateral trade deals, including with the United States.

Italy, while supporting the agreement in principle, wants changes to agricultural sections. Italian Agriculture Minister Francesco Lollobrigida deems the current draft “unacceptable,” calling for Mercosur countries to meet EU standards on workers’ rights and environmental protection.

The summit in Montevideo may see European Commission President Ursula von der Leyen in attendance. However, diplomats remain skeptical about an immediate signing.

One European diplomat in Brasília stated, “If Ursula goes to Montevideo, it will be to show the EU’s commitment to concluding the deal, but it won’t be signed.”

As negotiations continue, the fate of this long-sought trade agreement remains uncertain. The dance between Mercosur and the EU continues, with each step forward potentially followed by two steps back.

For the full picture, see our Mercosur EU Trade Deal: Complete Guide.

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