The historic Mercosur Treaty has come to a conclusion, which unites the European Union with four other Latin American countries in a gigantic (almost) tariff-free market. These are Argentina, Brazil, Paraguay and Uruguay. The news was announced on 6 December by the president of the European Commission, Ursula von der Leyen, who is in Montevideo in Uruguay to sanction the agreement. After 25 years of negotiations, Brussels was in a hurry to close, also for fear of possible new tariffs from Donald Trump, as well as trade conflicts with China. The treaty provides for the almost total elimination of duties on goods exported and imported from EU states to or from the Latin American countries involved.
Together with the agri-food sector (at the center of bitter battles), the treaty concerns a whole series of raw materials, such as minerals (see lithium, essential for electric car batteries), machinery and equipment. In this last phase, Germany and Spain had pushed for the yes, while France and Poland were clearly opposed, eventually also finding the support of Italy, which does not want to antagonize an agricultural sector which is quite clearly opposed to the conditions of the agreement. We have written extensively about which countries and sectors gain from the agreement and which do not, in this article.
The conclusion of the Mercosur negotiations in Uruguay
The free trade agreement was signed between the EU and Mercosur, the Latin American free trade area made up of Argentina, Brazil, Paraguay and Uruguay, with Bolivia on stand-by to complete the accession process and Venezuela suspended for internal issues. “We have concluded the negotiations for the EU-Mercosur agreement. Now I look forward to discussing it with the EU countries”, announced the President of the European Commission, Ursula von der Leyen, at the end of the morning of 6 December, with a post on his X account. “This deal will work for both people and businesses. More jobs. More choices. Shared prosperity,” he added.
The agreement comes after approximately 25 years of intense negotiations, which have faded and been resurrected based on the political and economic dynamics that have taken place. During his first term, von der Leyen insisted on reaching a conclusion. He has now achieved the result, despite the strenuous opposition of French farmers and the Paris government.
“We create a market of 700 million people. Trade agreements go beyond economics, they reflect our common values, and the EU-Mercusur agreement reflects our commitment against deforestation and to the implementation of the Paris agreements”, said the leader of the EU executive at a press conference in Montevideo, speaking of a “win-win agreement”. “European strategic investments will be facilitated, and will impact sectors that are linked to people’s daily lives. And, addressing Europeans, I say: this agreement is a victory for the EU”, he concluded, speaking of a historic day and thanking the leaders negotiators “for their dedication and determination”.
The reaction of the right and left in the European Parliament
In recent months, both Germany led by Chancellor Olaf Scholz and Spain led by Prime Minister Pedro Sanchez have contributed to supporting von der Leyen’s work. Both are part of the socialist family. In the European Parliament, the Socialists and Democrats (S&D) group, however, reacted cautiously to von der Leyen’s announcement. “S&D will now carry out a thorough assessment of the agreement and its implications. We look forward to starting the parliamentary process, with full transparency and dialogue with all parties,” the group wrote on its X account. by the Popolari group, the political family to which von der Leyen belongs.
Who gains (and who loses) from Mercosur
“The agreement simplifies exports, lowers tariffs and sets standards, creating significant job opportunities and economic growth in Europe. This is a necessary boost for the EU’s competitiveness. We must now quickly ratify the trade agreement,” he said. said Jorgen Warborn, EPP group spokesperson for international trade. The liberal Renew group, largely made up of French people, who oppose the agreement, reacted negatively. Firm condemnation also from the Green group and that of La Sinistra (The Left), of which the Movimento5Stelle is part.
The next steps for the EU-Mercosur agreement
The agreement will however have to be discussed and approved, both by the European Parliament and within the Council of the EU, which brings together the heads of state and government of the member states. France is determined to form a minority bloc together with Italy and Poland to prevent the Treaty from coming into force. French farmers, who have taken to the streets since mid-November to oppose Mercosur, have already promised to “harden” their protest following von der Leyen’s announcement.
Copa-Cogeca, the influential agricultural lobby in Brussels, led by the Italian Massimiliano Giansanti, reacted with disappointment, highlighting the vulnerabilities of farmers in the face of Latin American products that would arrive in Europe at too low prices and without the necessary guarantees of health offered by EU producers. The organization has announced a “flash action” for Monday 9 December in Brussels, when the Agriculture Ministers of the Member States will meet in the European capital for the usual monthly council.
