The trade agreement between Mercosur and the European Union has suffered yet another postponement, frustrating expectations for the conclusion of negotiations that have been going on for more than two decades.
The decision became clear during the Mercosur leaders’ summit held in Foz do Iguaçu (PR), when Paraguay assumed the presidency of the South American bloc.
Due to resistance from some member countries, mainly France and Italy, who asked for the vote in the European Council to be postponed.
On the eve of the Mercosur meeting, when the signing of the agreement was expected, he set fire to a central square in Brussels, the capital of Belgium, close to the European Parliament.
This stance prevented Ursula von der Leyen, president of the European Commission, from .
Agricultural protectionism as the main obstacle
The main point of conflict in the negotiations is related to trade protectionism, especially due to pressure from European farmers. They fear that the entry of South American products into the European market could harm their businesses and cause negative economic impacts on their sectors.
Despite the frustration with the postponement, the President of the Republic, Luiz Inácio Lula da Silva (PT), reported that he received a .
Italian Prime Minister Giorgia Meloni signaled that she can work to convince her country’s agricultural sector and make it possible to sign the treaty on the promised date.
After expressing harsh criticism and even indicating that he would not continue with the negotiations, President Lula demonstrated confidence in a positive outcome for this agreement that has been discussed for more than twenty years.
Mercosur agreed to wait for the new deadline established by European leaders, maintaining the expectation of the completion of the commercial treaty that promises economic benefits for both blocs.
What is the Mercosur-EU free trade agreement?
Mercosur and the European Union are working on building a free trade agreement between the two blocs.
These are bilateral treaties signed between blocks and/or countries to open the door to business between the parties.
Rules of origin, trade in services, government procurement, intellectual property, technical barriers, trade defense and other topics that these agreements address and seek to facilitate.
This modality is broader than trade preference agreements, which promote this openness in the trade of goods to a lesser extent, without establishing minimum or maximum trade limits.
During the Latin America, Caribbean and EU Summit, held in Rio de Janeiro, between June and July 1999, negotiations between Mercosur and the European bloc were launched. At the beginning, the assessment was that the negotiations would be long and difficult.
Initially, the interest was in the complementarity that the parties had to offer each other: while Mercosur has strong opportunities in agribusiness — mainly due to Brazil —, the EU has a more robust industry — led by Germany.
Over the years, it remains competitive against the Chinese, making the agreement an alternative for the security of its economy. Meanwhile, French agribusiness made Europe its main client, but did not evolve enough to compare with Brazilian agribusiness.
Due to the complexity of the subject, the debate lasted 25 years. Now, at the Mercosur Heads of State Summit, expectations are high for the agreement to be announced.
In December 2024, in Montevideo, capital of Uruguay, which hosted the bloc’s Summit of Heads of State.
What does the agreement provide?
The goods chapter establishes free trade between Mercosur and the European Union, based on commitments between the parties on trade in goods.
Topics such as national treatment, taxes and other charges on imports and exports, import and export licensing procedures, taxes on exports, state-owned companies, repaired goods and others are addressed to establish the basis of the agreement.
92% of products originating in Mercosur and 95% of tariff lines must be free from taxation in the EU, according to the preferences set out in the goods chapter. For comparative purposes, without the agreement, only 24% of exports arriving in Europe are tariff-free.
On the part of Mercosur, the forecast is to release 91% of imports originating in the EU from charges.
The EU will eliminate 100% of its industrial tariffs within ten years, while Mercosur will cut 91% in terms of tariff and trade lines within 15 years.
In agribusiness, the EU should guarantee preferential access to Mercosur for practically all its agricultural products and 97% of tariff lines, while members of the South American bloc will give Europeans access to 98% of trade and 96% of tariff lines.
Rules of origin, trade facilitation, government purchases, standardization of intellectual property and even support for small and medium-sized companies and the services sector are provided for in the agreement, in addition to other issues covered.
Safeguards
Throughout 2025, both parties internally debated the regulation of the agreement. On the EU side, progress was sought in .
Countries led by France and demanded additional measures to protect their farmers.
Mercosur countries are strongly opposed to the safeguards recently created by the European Union against their agricultural products, the free trade agreement between the two blocs. According to reports made to CNN Brazilthe objective is to avoid more virulent reactions, which could lead to an escalation of mutual accusations between the EU and Mercosur.
Future of the agreement
The final declaration of the Mercosur Leaders Summit, held on December 20th in Foz do Iguaçu, reflected one of the South American presidents: .
Upon assuming the pro tempore presidency of the bloc, Paraguay gave its message about the agreement with the EU: it has to continue the dialogue and attempt to sign the treaty, but the .
Meanwhile, members of the Brazilian government started to defend that the bloc focuses on doing things under the radar. , in different stages, not counting the review of pacts already in force.
Published by João Nakamura
