EU pushes forward long-discussed free trade deal with South America

The European Union has rekindled talks over a landmark free trade agreement with five South American nations, coming just one week after the United States conducted a controversial operation to detain Venezuelan President Nicolás Maduro.

EU agriculture ministers convened in Brussels on Wednesday to address the delicate balance between protecting European farmers and securing the economic advantages of a trade deal with the Mercosur bloc, which includes Brazil, Argentina, Bolivia, Paraguay, and Uruguay. The agreement would represent the largest free trade deal ever negotiated by the EU.

“It’s a landmark one. This is the biggest free trade agreement we ever negotiated,” said EU trade negotiator Maroš Šefčovič following the meeting. He emphasized that the deal could increase EU agricultural exports by up to 50% and stressed the importance of maintaining the bloc’s reputation. “Our trading partners value the EU for one particular thing in this turbulent world, one thing above all, this is credibility. We must safeguard this priceless currency by remaining a trusted and reliable trading partner.”

Negotiations will continue Friday, with speculation mounting that an agreement could be signed in Paraguay on January 12. The potential breakthrough follows a significant setback in December when fierce opposition from France, fueled by angry farmers, forced European Commission President Ursula von der Leyen to cancel a trip to Brazil where officials had hoped to finalize the agreement after 26 years of negotiations.

Italy has emerged as the pivotal player in securing approval. If Italian Prime Minister Giorgia Meloni joins Germany in supporting the deal, it would likely pass despite objections from France and Poland. While Meloni welcomed von der Leyen’s proposal to expedite funding for farmers, she has not yet committed her crucial backing to the agreement.

The Mercosur trade deal would cover a market of 780 million people and approximately a quarter of the world’s GDP, progressively eliminating duties on almost all goods traded between the regions. Its successful implementation would showcase a stark contrast in diplomatic approaches to South America compared to the Trump administration’s recent incursion into Venezuela and confrontational rhetoric across the region.

For the EU, securing new trade partnerships has taken on heightened urgency amid growing commercial tensions with both the United States and China. The December delay of the Mercosur agreement was widely perceived as damaging to the EU’s credibility in trade negotiations.

French President Emmanuel Macron remains firmly opposed to the deal, viewing it as fuel for the surging far-right movement that has garnered support by criticizing such agreements. His government has demanded additional safeguards, including enhanced monitoring to prevent economic disruption in the EU, stricter regulations in Mercosur nations such as pesticide restrictions, and increased inspections of imports at European ports.

“As long as the combat is not over, nothing is lost,” French Agriculture Minister Annie Genevard told France Info, reaffirming France’s opposition. She highlighted concerns about the deal’s impact on several sectors including beef, chicken, sugar, ethanol, and honey. Genevard noted that even if the EU Commission signs the agreement on January 12, it would still require approval from the European Parliament.

Proponents argue that the EU-Mercosur deal would offer a clear alternative to Beijing’s export controls and Washington’s tariff policies, while critics contend it would undermine environmental regulations and threaten Europe’s agricultural sector. Šefčovič has indicated that recent negotiations have led to new safeguards, including “semiautomatic triggering thresholds” that would activate if Mercosur imports significantly undercut EU products.

Despite political tensions between Mercosur nations—particularly between Argentina’s far-right President Javier Milei and Brazil’s center-left leader Luiz Inácio Lula da Silva—South American leaders remain committed to the European partnership, recognizing the benefits it would bring to their agricultural sectors.

Venezuela, which was suspended from Mercosur in 2016, is not part of the current negotiations. The suspension was criticized at the time by Delcy Rodríguez, then Venezuela’s foreign minister and now its prime minister.

The coming days will prove decisive for a trade agreement that has been decades in the making and could reshape economic relations between Europe and South America for generations to come.