The European Commission and Mercosur countries are working to complete negotiations on a long-anticipated trade deal by early December, sources familiar with the discussions told POLITICO.

Farmers are expected to rally against the deal in Brussels on Wednesday, with additional protests in France later in the week.

The upcoming G20 summit in Rio de Janeiro was initially seen as the ideal opportunity to finalize the agreement, which has been under negotiation for nearly 25 years.

“All the cards are on the table,” said one person familiar with the EU-Mercosur talks. “They want to ensure a near-finalized deal, so Ursula [von der Leyen] doesn’t make the trip in vain.” However, the signing of the agreement might be delayed over concerns that China could overshadow the summit.

A European Commission official confirmed that face-to-face talks are scheduled for the week of November 25 in Brazil to resolve any outstanding issues. While the official refrained from specifying a completion date, they emphasized that the Mercosur nations—Brazil, Argentina, Uruguay, Paraguay, and new member Bolivia—are pushing to sign the agreement promptly.

Uruguay is set to host the Mercosur summit from December 2–4, with Argentina, under newly elected Javier Milei, assuming the bloc’s presidency.

China concerns accelerate EU-Mercosur deal timeline

This “cows-for-cars” trade deal would eliminate trade barriers and establish a common market encompassing around 800 million people, representing 20% of global GDP. For European countries, particularly Germany, this agreement is viewed as overdue, especially given China’s expanding economic footprint in South America, where European firms are increasingly being sidelined.

“If we don’t reach a trade agreement with [Mercosur], China will inevitably fill the void,” remarked Kaja Kallas, the EU’s new foreign minister, on Tuesday. Citing data, she added that Chinese investment in Latin America surged 34-fold between 2020 and 2022.

Those familiar with the negotiations indicated that certain issues remain unresolved, including public procurement regulations, environmental provisions, and the legal structure of the agreement.

Mercosur nations are particularly keen on securing more flexibility from the EU and additional time for local firms to compete with European counterparts. Brazil has also expressed a desire to protect its domestic automotive industry from EU imports, especially electric vehicles.

France’s reluctance and Macron’s challenges

French Trade Minister Sophie Primas recently stated to POLITICO that Mercosur countries are eager to finalize the deal before the Mercosur summit. However, Primas remains skeptical that the agreement will enable the EU to effectively counter China’s influence in Latin America.

Amid concerns over a potential surge in agricultural imports, France successfully blocked the Mercosur negotiations in January, just as they were nearing completion. This time, however, President Emmanuel Macron faces a tougher challenge, especially after recent electoral setbacks in the European Parliament and National Assembly.

In a recent letter published in Le Monde, over 600 French MPs from both parliamentary chambers urged von der Leyen not to proceed with the deal, citing unmet democratic, economic, environmental, and social standards for an agreement with Mercosur.

Paris falls short of blocking coalition

Despite recent efforts to secure opposition, Paris is unlikely to gather the qualified minority—representing at least 35% of the EU population—needed to block the deal when it comes to a vote among EU member states.

France has also launched a diplomatic campaign to persuade other EU nations to oppose the agreement. However, two diplomats with direct knowledge report that Italy has not been swayed.

Italy remains cautious in supporting the deal, wary of the potential for political fallout like that seen in France.

‘France’s opposition is symbolic; the battle is lost’

Over the weekend, Macron traveled to Argentina to meet with Milei ahead of the G20 summit in Brazil. Meanwhile, Italian Prime Minister Giorgia Meloni is scheduled to visit Buenos Aires on November 20.

Although French ministers have vehemently opposed the deal and increased efforts to build a blocking minority, Prime Minister Michel Barnier has kept a low profile. Barnier is expected to meet with von der Leyen and EU Trade Commissioner Valdis Dombrovskis in Brussels today (November 13) and will likely address the Mercosur agreement, which he opposes in its current form.

Critics argue that France’s resistance is mostly symbolic, and that Paris has already lost this battle.

For years, France has insisted on incorporating the Paris Agreement and enacting legally binding deforestation commitments as part of the Mercosur deal. In response, the European Commission has indicated its intent to support French demands in the final phase of negotiations, although Mercosur countries have repeatedly signaled their resistance to any form of sanctions.

Japan and the UK are set to initiate an economic version of the “two plus two” dialogue—a regular meeting between foreign and trade ministers—due to rising concerns about possible tariffs from U.S. President-elect Donald Trump.

Japanese Prime Minister Shigeru Ishiba and his British counterpart, Keir Starmer, are scheduled to meet in Rio de Janeiro during the upcoming G20 Summit on Monday, November 18. According to officials from both governments, the goal is to establish a bilateral economic dialogue.

This development follows Trump’s recent election victory and his anticipated return to the White House in January. During his campaign, Trump pledged to impose tariffs of 60% on imports from China and 10-20% on imports from other nations, including Japan and the UK.

The Japan-UK economic dialogue aims to strengthen cooperation in upholding the international economic order, including principles of free trade.

Topics at the meeting will cover a wide range of strategic and geopolitical issues. Both partners are expected to explore ways to initiate a trade dialogue with the U.S. to prevent a potential tariff hike. Sources indicate that countermeasures may also be on the table if U.S. import tariffs do increase.

In 2023, 20% of Japan’s exports and 15% of the UK’s exports were destined for the U.S., underscoring the potential economic impact of increased tariffs.

Additionally, the UK hopes that a strengthened partnership with Japan can help offset its reduced influence since leaving the European Union (EU) in 2020.

During the previous Trump administration, the EU (of which the UK was then a member) imposed retaliatory tariffs on U.S. steel and motorcycles in response to Washington’s high import duties.

Italian President Sergio Mattarella’s recent visit to China marked an important milestone in Sino-Italian relations, with the Italian leader urging Chinese President Xi Jinping to leverage China’s influence to help end global conflicts, arguing that open markets are an “antidote to war.”

In an interview with the Chinese television station CGTN on Sunday, Mattarella spoke with He Yanke, host of the Leaders Talk program, and emphasized China’s potential role in promoting global peace.

Mattarella stated that he had encouraged Xi to help end ongoing conflicts, underscoring Beijing’s influence on the international stage.

“China is one of the key players in international relations,” Mattarella said, adding that during his three-day visit to Beijing, he hoped China would use its global position to uphold the principles of international law and peaceful coexistence.

In particular, Mattarella called for Beijing’s support in “ending Russia’s brutal aggression against Ukraine’s independence and territorial integrity and taking the first steps toward a just peace based on the principles of the United Nations Charter.”

Encouraging Beijing to support a wwo-State solution in Palestine

The Italian President also addressed the Middle East crisis, decrying the “unacceptable wave of violence” devastating civilian populations.

“The war must stop immediately to find a solution to the enormous humanitarian crisis it is creating,” he said, expressing hope that China would “raise its voice to promote restraint and facilitate a two-state solution between Israel and Palestine among regional actors.”

On the economic front, Mattarella described open markets as “the antidote to war” and stated, “Every message promoting political, economic, and trade cooperation strengthens peace. Open markets and trade cooperation support social prosperity and are an alternative to conflict.”

Second high-level visit after Belt and Road withdrawal

Mattarella’s visit, which followed that of Prime Minister Giorgia Meloni in July, signaled a rebuilding of relations after recent tensions over Italy’s withdrawal from the Belt and Road Initiative (BRI).

Mattarella reiterated the “exceptional” nature of Italy-China relations, noting that it was unusual for both an Italian president and prime minister to visit China in such a short time.

“This underscores the importance of Italy’s relations with China and the priority Italy places on developing these ties,” Mattarella said, describing the relationship as one of “friendship.”

Xi Jinping described the visit as a “new historical starting point.”

Xi warmly welcomed Mattarella, calling him “an old friend of the Chinese people and my good friend,” highlighting that their long-standing relationship, maintained through phone calls and letters, had fostered bilateral cooperation even in challenging times.

Xi called the visit a “new historic starting point” for Italy-China relations.

Their discussions also touched on China-EU tariffs and included a “non-ideological reflection on the need for a new world order” in response to rapid global changes.

“The world is undergoing great, intense, profound, and rapid changes,” Mattarella said, stressing that a “spirit of unity” is essential to confront these changes.

Ten cooperation agreements signed between Rome and Beijing

The visit concluded with the signing of ten cooperation agreements between Rome and Beijing, covering areas such as film production and competition regulations.

Speaking at a university in Beijing on Saturday, Mattarella also called on China to remove trade barriers for Italian products, noting that “China is Italy’s largest economic partner in Asia.”

During the conference, he emphasized the need for “a balanced relationship that includes the removal of barriers preventing high-quality Italian products from entering the Chinese market.”