The EU gave a long-delayed go-ahead on Friday (January 9, 2026) to a huge trade deal with South American bloc Mercosur championed by business groups but loathed by many European farmers \u2014 overriding opposition led by key power France.<\/p>\n
Most of the European Union’s 27 nations backed the pact following an Ambassadors’ meeting in Brussels, paving the way for it to be signed later this month in Paraguay.<\/p>\n
More than 25 years in the making, supporters see the deal as crucial to boost exports, support the continent’s ailing economy and foster diplomatic ties at a time of global uncertainty.<\/p>\n
European Commission chief Ursula von der Leyen called it “proof that Europe charts its own course and stands as a reliable partner”. She said she looked forward to the signing \u2014 which Argentina said was planned January 17.<\/p>\n
German Chancellor Friedrich Merz said the deal sent “an important signal of our strategic sovereignty and capacity to act”, a message echoed by Spain, which said it would “forge shared prosperity” with Latin America.<\/p>\n
On the Mercosur side, Brazil’s President Luiz Inacio Lula da Silva hailed “a historic day for multilateralism”.<\/p>\n
And Paraguay’s Foreign Minister, one of the four founding members of Mercosur, along with Argentina, Brazil and Uruguay, defended the deal as “balanced”.<\/p>\n
But the European Commission, which negotiated the text, failed to win over all of the bloc’s member states.<\/p>\n
Heavyweight France, where politicians across the divide are up in arms against a deal attacked as an assault on the country’s influential farming sector, led an ultimately unsuccessful push to sink it.<\/p>\n
Ireland, Poland, Hungary and Austria also voted against the accord. That was not enough to block it; however, after holdout, Italy ultimately threw its weight behind the pact.<\/p>\n
‘Economic clout’ <\/p>\n
The deal will create a vast market of more than 700 million people, making it one of the world’s largest free trade areas. <\/p>\n
Part of a broader push to diversify trade in the face of U.S. tariffs, it will bring the 27-nation EU closer together with Brazil, Paraguay, Argentina and Uruguay, removing import tariffs on more than 90% of products. <\/p>\n
This will save EU businesses four billion euros ($4.6 billion) worth of duties per year and help exports of vehicles, machinery, wines and spirits to Latin America, according to the EU.<\/p>\n
It will also help the bloc reduce its dependency on China for critical raw materials, said Agathe Demarais, of the European Council on Foreign Relations, a think tank. <\/p>\n
“The conclusion of the EU-Mercosur trade deal is great news for Europe’s global geopolitical and economic clout,” she said.<\/p>\n
Germany, Spain and other backers believe the deal will provide a welcome boost to their industries hampered by Chinese competition and tariffs in the United States.<\/p>\n
But France and other critics opposed it over concerns that their farmers would be undercut by a flow of cheaper goods, including meat, sugar, rice, honey and soybean, from agricultural giant Brazil and its neighbours.<\/p>\n
French Agriculture Minister Annie Genevard argued that it was “not the end of the story”, as the European Parliament had still to vote on the deal.<\/p>\n
With the deal still requiring approval from the European Parliament, France has warned against any attempt to bring it into force before then.<\/p>\n
‘Pain’ vs ‘benefits’ <\/p>\n
Farmers in several European countries mounted a final show of anger against the text’s approval, marching in protest in Warsaw and blocking roads in France and Belgium.<\/p>\n
“There is a lot of pain,” Judy Peeters, a representative for a Belgian young farmers group, told AFP at a protest on a motorway south of Brussels. “There is a lot of anger.”<\/p>\n
Over the past months, the commission has been at pains to reassure farmers and their backers that pros outweigh cons.<\/p>\n
It has stressed that the accord is expected to boost EU agri-food exports to South America by 50%, in part by protecting more than 340 iconic European products \u2014 from Greek feta to French champagne \u2014 from local imitations.<\/p>\n
It also laid out plans to set up a 6.3 billion-euro crisis fund and safeguards allowing for the suspension of preferential tariffs on agricultural products in case of a damaging surge in imports.<\/p>\n
The latter were tightened further at the last minute by member states lowering the threshold for action, a late concession to Italy.<\/p>\n
Angry farmers disrupted traffic in Milan with their tractors Friday, dumping barrels of straw and pouring milk on the ground in front of the regional council building.<\/p>\n
But Italian Prime Minister Giorgia Meloni defended an agreement she hoped would “bring benefits in many areas” and “for everyone”. <\/p>\n
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