Brazil Tells EU It Will Not Reopen Mercosur Trade Deal

Brazil has notified the European Commission that it will not accept reopening the Mercosur-EU agreement, amid a French demand for an additional safeguard to protect its farmers.

The safeguard would apply once specific volume or price thresholds are met for imports of beef, chicken, and sugar from Brazil, Argentina, Paraguay, and Uruguay, through an additional “political protocol.”

The European Commission, which negotiates on behalf of the 27 member states, has never submitted a formal document proposing a new safeguard for Mercosur. But it already knows Brazil’s answer: a clear no. For the Brazilian government, a new safeguard with new figures or rules would amount to reopening the deal finalized in Montevideo at the end of last year—an option that is off the table.

At the time, the European Commission even made a point of stating on its website that it had secured a win for European farmers, particularly through the inclusion of a safeguard.

It explained that Brussels would grant minimal access to its market for agricultural and food imports from Mercosur. For sensitive products such as beef, poultry, and sugar, access to the EU market would be permanently restricted through the gradual application of quotas.

Moreover, a bilateral safeguard clause could be triggered if rising imports from Mercosur cause—or even merely threaten to cause—serious harm to relevant sectors in the EU. For the first time, this safeguard clause would also apply to imports within quota limits—that is, to volumes already subject to caps.

According to some observers in Europe, France will never be satisfied with the Mercosur deal. Previously, it demanded guarantees around compliance with the Paris Agreement. Now it is pushing for a new agricultural safeguard. If that were granted, Paris would likely raise another issue. In practice, the French government is always seeking more time.

The problem in France is purely a domestic political issue. Behind closed doors, parts of the French government acknowledge that the Mercosur deal is beneficial—especially amid the current geopolitical turbulence. But Macron took a hard line in opposing the agreement and now faces difficulty in walking that back.

Sources suggest the French could now pursue a side agreement among themselves, focused on issues outside the scope of the bi-regional accord.

What’s clear is that the European Commission had promised to submit the agreement to the European Council by the end of June for review by heads of state and government—but has yet to do so. The prevailing sentiment is that the time has come for Brussels to make a decision and stop kicking the ball back to Mercosur.

This Wednesday, Germany’s new chancellor, Christian Democrat Friedrich Merz, will host French President Emmanuel Macron in Berlin, marking their first meeting since Merz took office. One of the topics at their dinner will be the EU-Mercosur agreement.

Both Macron and Merz have emphasized their interest in deeper cooperation on defense, economic competitiveness, and migration policy.

From the German perspective, implementation of the EU-Mercosur deal is of the highest importance.

However, Macron may point to the recent passage of a weakened environmental licensing bill in Brazil’s Congress—which, in the words of Environment Minister Marina Silva, was “gutted.” The minister cited legal, environmental, economic, and social harm resulting from what she described as the “dismantling of environmental legislation.”

The question is how European leaders can criticize a decision made by Brazil’s Congress while simultaneously pursuing trade agreements with the United States—despite the environmental indifference of Donald Trump.

As for Argentina’s position on the agreement, Javier Milei’s priority remains aligning closely with his ally Donald Trump. Yet despite his unpredictability, the message he has sent to Mercosur partners is one of firm support for the agreement’s implementation with the EU.

Source: Valor Econômico

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