EU Poised to Approve Landmark Mercosur Trade Deal Despite Fierce Resistance

After 25 years of deadlock, the European Union is on the verge of a historic breakthrough. EU ambassadors meeting in Brussels today are expected to authorize the signing of a massive trade agreement with the Mercosur bloc (Argentina, Brazil, Paraguay, and Uruguay).

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This move comes despite a wave of farmer protests across Europe and a high-stakes diplomatic standoff led by France.

The Path to Approval: Italy’s Strategic Shift

The momentum shifted decisively in the final days of negotiations. While the deal long appeared stalled, the European Commission managed to fracture the opposition:

• The Italian Pivot: Italy’s decision to support the deal—following a €45 billion agricultural aid package and stricter import safeguards—has effectively neutralized the “blocking minority.”
• A “Qualified Majority”: With the support of Germany, Spain, and now Italy, the deal meets the threshold of 15 countries representing 65% of the EU population, making a French-led veto unlikely.

Economic Ambitions vs. Agricultural Fears

The deal represents one of the largest free-trade zones in history, but it remains deeply divisive:

• The Strategic Win: Supporters, led by Germany, view the deal as essential for diversifying supply chains away from China. It opens South American markets to European cars and machinery while securing access to critical minerals like lithium and copper.
• The Agricultural Backlash: Farmers in France, Ireland, and Poland have taken to the streets with tractor blockades. They argue the deal creates “unfair competition” by allowing cheap South American beef and sugar into Europe that does not meet the same strict environmental and sanitary standards.

Current Status of the Bloc

Next Steps: The Road to Asunción

If the ambassadors grant approval today, the timeline moves rapidly:

1. Monday, Jan 12: A formal signing ceremony is expected to take place in Paraguay.
2. Parliamentary Approval: The deal will then move to the European Parliament for a vote.
3. Interim Application: Once the EU Parliament approves the trade portion, the lowering of tariffs can begin even while the full political agreement awaits ratification by individual national parliaments.