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.
