Italy backs historic EU-Mercosur trade deal after 25 years of negotiations

EU and South America Seal Historic Free Trade Deal After 25-Year Negotiations

Italy has provided crucial backing for the European Union’s landmark free trade agreement with five South American nations, ending negotiations that have spanned more than two decades. The deal, which encompasses Brazil, Argentina, Bolivia, Paraguay, and Uruguay—collectively known as Mercosur—will create one of the world’s largest free trade zones covering approximately 780 million people.

Italian Prime Minister Giorgia Meloni’s support was seen as the decisive vote needed to push the agreement forward. Italy’s Foreign Minister Antonio Tajani celebrated the decision, noting the agreement could help boost EU exports to around €700 billion ($814 billion).

“This agreement is destined to boost our exports,” Tajani wrote on X, formerly Twitter. Meloni clarified that her support came after securing adequate protections for Italian agricultural producers: “We have always said we will be in favor of it when there are sufficient guarantees for our farmers.”

European Commission President Ursula von der Leyen hailed the vote as “a strong signal” of the EU’s economic influence in an increasingly unstable global environment. She announced plans to travel to Paraguay for next week’s Mercosur summit, emphasizing the deal’s importance “at a time when trade and dependencies are being weaponized.”

The agreement will now proceed to the European Parliament for final ratification before implementation.

The deal represents a significant diplomatic achievement for Brussels amid global economic uncertainty and increasing protectionism. German Chancellor Friedrich Merz described it as “a milestone in European trade policy and an important signal of our strategic sovereignty.”

For South America, the agreement brings substantial economic opportunities. Brazilian President Luiz Inácio Lula da Silva, whose country possesses the largest economy in the Mercosur bloc at approximately $2.3 billion, celebrated the breakthrough as “a historic day for multilateralism” on social media.

The timing is particularly strategic for the EU, which has been diversifying its trade relationships to reduce dependence on traditional markets following the trade tensions during Donald Trump’s presidency. Brussels has recently concluded trade agreements with Japan and Indonesia and is pursuing negotiations with India.

“For Europeans, the finalization of free-trade agreements with new partners stands among the best responses to US tariffs, growing protectionism and trade tensions with China,” said Agathe Demarais, senior fellow at the European Council on Foreign Relations. She added that the deal could help the EU reduce its reliance on China for critical raw materials by accessing Mercosur’s natural resources.

The agreement faced significant opposition, primarily from France and Poland, where farmers have staged dramatic protests against what they perceive as unfair competition. Austria, Hungary, and Ireland also voted against the deal. French President Emmanuel Macron maintained that the economic benefits—estimated to add just €77 billion (0.5% of EU GDP) by 2040—did not justify the risks to European agriculture.

However, the negotiations did produce additional safeguards, including an “emergency brake” mechanism to halt imports if they undercut EU prices by 5% or more, requirements that Mercosur countries follow EU food safety regulations, and increased inspections of agricultural imports.

Environmental groups remain concerned about the deal’s potential impact. Green MEPs have pledged legal action, arguing the agreement could accelerate Amazon deforestation and undermine EU climate targets. Frances Verkamp of Friends of the Earth Europe called the deal “toxic,” suggesting it represents “imperial dominance in global trade” that benefits neither workers nor the environment.

Despite these objections, the agreement’s approval marks a significant step in reshaping global trade patterns at a time of increasing economic nationalism. The EU-Mercosur deal positions Europe as a champion of multilateral trade cooperation while potentially creating new economic opportunities across two continents.