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

On the other side of the Atlantic, Brazil’s President Luiz Inácio Lula da Silva celebrated the agreement. His country’s economy, worth between $2.3 billion and $2.1 billion last year, is by far the most robust of the South American trade bloc.

“This is a historic day for multilateralism,” Lula said in his social media channels. “In an international scene of growing protectionism and unilateralism, the (EU-Mercosur) deal is a favorable sign for international trade to be a factor for economic growth, with benefits for both blocs.

Countering Trump’s tariff threats

In the wake of Trumps’ tariff wars, Brussels has sought to curtail its dependency on the U.S. market with trade deals forged across the world. The EU has struck deals with Japan and Indonesia, and are working on one with India.

A delay in December to the signing of the deal had infuriated Lula and led experts to worry a last-minute stumble would wreck the EU’s credibility.

“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, a senior fellow at the European Council on Foreign Relations. She said the current EU reliance on China for some critical raw materials could be broken by tapping into Mercosur’s deposits.

Opposition to the deal was led by France and Poland, with riled-up farmers flooding streets and blocking roads with tractors from Brussels to Athens. Austria, Hungary and Ireland also voted against it.

Ireland’s Prime Minister Micheal Martin said Thursday in Shanghai during a state visit to China that “we don’t have confidence that (Irish farmers) wouldn’t be undercut by that,” according to Irish public broadcaster RTE.

Both Martin and French President Emmanuel Macron said that internal negotiations sparked by the political furor surrounding the deal had led to reforms that better protect European farmers. But they acknowledged such reforms were not enough to overcome domestic political pressure.

Posting on X on Thursday, Macron said three of France’s key demands were now being met: New safeguards to an “emergency brake” of imports if they are found to undercut EU prices by 5% or more; the mirroring of EU food safety regulations in the Mercosur bloc; and an increase of inspections of agrifood imports at EU ports and beyond.

Still, Macron said the potential economic gains of the Mercosur deal are limited and do not justify the risks it poses to EU agriculture. His office stated that the deal would only add 77 billion euros ($89.7 billion) by 2040 — 0.5% of the EU’s GDP.

Green members of the European Parliament had vowed to take the Commission to court over the deal. They said the agreement would accelerate deforestation in the Amazon and weaken the EU’s climate targets.

Frances Verkamp, trade campaigner at Friends of the Earth Europe, described the deal as “toxic.” She said Brussels is “playing a game of imperial dominance in global trade with China and the U.S. that wins nothing for workers or consumers — and even less for nature and climate.”

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Zampano reported from Rome. Associated Press writers Sylvie Corbet in Paris and Mauricio Savarese Sao Paulo contributed.

Sam Mcneil And Giada Zampano, The Associated Press