EU clears path for Mercosur trade deal after decades of deadlock

The European Commission took a major step on Wednesday toward signing a sweeping trade agreement between the EU and the Mercosur bloc.

Brussels addressed France’s concerns by proposing a safeguard to protect farmers if beef and poultry imports from Latin America destabilize local markets.

The Mercosur deal had been stalled for 25 years, facing strong opposition from powerful European farmers who feared an influx of cheap agricultural goods would undermine local producers.

Even after negotiations concluded last December, France—backed by Italy and Poland—opposed the deal and threatened to block its ratification amid continent-wide farmer protests.

However, US President Donald Trump’s launch of a global trade war this year, including tariffs on European and Latin American goods, gave momentum to the agreement.

The Mercosur group, made up of Brazil, Argentina, Paraguay, and Uruguay, was also hit by Trump’s unpredictable tariffs. Trump imposed a 50% tariff on Brazil following the arrest of former President Jair Bolsonaro, who was on trial for an attempted coup.

Trade Commissioner Maroš Šefčovič said while presenting the deal, “In today’s uncertain geopolitical environment, diversifying our supply chains and deepening partnerships with reliable allies, partners, and friends is not a luxury. It is a necessity. These agreements will reinforce the EU’s economic presence in Latin America, which has recently declined.”

The move highlights a delicate balancing act for Brussels. After marathon negotiations, the EU leadership is trying to reassure skeptical member states without jeopardizing the long-awaited deal.

To appease critics in Paris and beyond, Brussels pledged on Wednesday to monitor beef and poultry imports, proposing an additional text that would allow tariffs or import limits if European agriculture was shown to be harmed.

Crucially, this safeguard would not require reopening the trade agreement itself.

Still, this was not enough to sway Warsaw. Polish Prime Minister Donald Tusk said Wednesday morning, “Poland will oppose Mercosur because we want to show and prove that we will not retreat when it comes to the interests of Polish agricultural producers.”

Tusk admitted, however, that he lacked partners to form a blocking minority. “Since the French do not want to form this blocking minority with us, we at least agreed they would cooperate with us to prepare a defense mechanism,” he added.

The so-called “cows-for-cars” agreement will eliminate tariffs on 91% of EU exports, including automobiles, within 15 years, and gradually remove tariffs on 92% of Mercosur exports over a period of up to 10 years.

French President Emmanuel Macron told his ministers on Wednesday that Paris had been “right to oppose previous versions” of the Mercosur deal but that his government must “scrutinize the details” of the new version.

Despite France’s renewed political deadlock—Prime Minister François Bayrou is expected to lose next week’s confidence vote due to a €43.8 billion austerity plan—Paris is cautiously endorsing the deal this time.

Trade Minister Laurent Saint-Martin said Wednesday he was “reasonably optimistic,” noting, “France is not opposed to this agreement in principle. What matters is having mechanisms that can limit imports and be deployed effectively.”

By offering safeguard commitments, Brussels is giving these countries a concrete way to placate their small but politically powerful farming constituencies. The Commission also intends to release €6.3 billion in long-term funds under the Common Agricultural Policy to help farmers weather potential market shocks.

A senior Commission official stated, “We always want to keep all family members happy. As with all member states, we worked with France over the summer and take all concerns very seriously. We are leaving no one behind in this debate.”

The texts adopted Wednesday (including a separate update to the EU’s trade agreement with Mexico) launch the ratification process within the bloc.

The trade and political chapters of the deal have been separated to speed approval. Ratification of the trade provisions requires only a qualified majority of 15 out of 27 EU member states, while the political chapter—covering national competences such as investment—requires unanimity.

The Commission expects to sign the agreement in early 2026, pending approval from member state capitals and the European Parliament.