EU to propose trade deal with Mercosur, facing opposition led by France

The free trade agreement between the European Union and Mercosur will be presented by the European Commission this Wednesday (Aug. 3) for approval, pitting Germany and other countries seeking new markets to offset Trump’s tariffs against France — the deal’s main critic — and its allies.

The European Union and the bloc formed by Argentina, Brazil, Paraguay, and Uruguay concluded negotiations on the agreement last December, roughly 25 years after talks first began.

It will now be submitted for EU approval, requiring a vote in the European Parliament and a qualified majority among EU governments — that is, 15 out of 27 member states representing 65% of the EU’s population. Approval is not guaranteed in either case.

The Commission and its supporters, such as Germany and Spain, argue that the deal offers a way to offset lost trade due to tariffs imposed by U.S. President Donald Trump and to reduce dependence on China, particularly regarding critical minerals.

Since Trump’s reelection last November, the EU has pushed to build new trade alliances, accelerating negotiations with India, Indonesia, and the United Arab Emirates, while deepening ties with existing free trade partners, including the United Kingdom, Canada, and Japan.

The EU executive said the deal with Mercosur is the largest ever signed in terms of tariff reductions and a necessary component of the bloc’s efforts to diversify its trade relations.

France — the EU’s largest beef producer and the most vocal critic of the deal — has labeled it “unacceptable.” European farmers have repeatedly protested, saying the agreement would lead to cheap imports of South American commodities, particularly beef, that do not meet the EU’s food safety and environmental standards. The Commission has denied these claims.

European environmental groups are also opposed to the agreement. Friends of the Earth has called it a “climate-wrecking deal.”

They hope the agreement will be blocked either in Parliament — where both the Greens and far-right are critical — or by EU governments, which may not reach the required majority if, as expected, Poland and Italy join France in opposition.

Proponents of the deal within the EU view Mercosur as a growing market for European cars, machinery, and chemical products, as well as a reliable source of critical minerals for the green transition — such as battery-grade lithium, which Europe currently imports from China.

They also highlight agricultural benefits, noting that the deal would offer greater access and lower tariffs for EU products like cheese, ham, and wine.

Source: Valor Econômico

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