The agreement between Mercosur and the European Union (EU) is expected to be signed next Saturday (20) during the South American bloc’s summit in Brasília. Negotiated for more than 25 years, the deal will still need to be ratified both by European countries and by EU legislators, a far from simple task, given the strong opposition the agreement faces across parts of the continent.
A vote in the European Parliament is expected to take place this week, requiring approval by a simple majority. In individual countries, however, the process is slower and has no fixed timeline. The agreement must be ratified by 15 of the EU’s 27 member states. Each country enters the agreement individually following approval by its own parliament, according to national ratification rules.
France is one of the leading opponents. Paris has formally requested that the European Union postpone the signing of the treaty, demanding that a strong and effective protection clause for its agricultural sector be agreed upon beforehand, that imports be controlled, and that South American farmers be required to meet the same production standards enforced within the EU.
Resistance to the agreement is driven by farmers in France and also in countries such as the Netherlands and Poland, who fear South American competition due to less stringent production standards, particularly regarding beef, poultry, and sugar.
The agreement, negotiated for more than two decades, would boost South American exports of commodities such as sugar, beef, and poultry to the EU, while facilitating European exports of industrial goods such as machinery, wine, and automobiles. A decisive vote within the European Union is expected between December 16 and 19.
In favor: Lula, Spain, and Germany
If approved, the deal would create a common market of 722 million people. This is one of the Brazilian government’s main arguments for concluding the agreement during its rotating presidency of Mercosur.
“It is an agreement that involves nearly 722 million people and US$22 trillion (around US$22 trillion) in Gross Domestic Product (GDP). It is extremely important, possibly the largest trade agreement in the world. And even after signing it, there will still be a lot of work before we can actually enjoy its benefits, but it will be signed,” President Luiz Inácio Lula da Silva said last week during the G20 meeting in South Africa.
The European Commission and proponents such as Germany and Spain argue that the agreement offers a way to offset trade losses caused by tariffs imposed by Donald Trump and to reduce dependence on China, particularly for critical minerals.
Supporters within the EU see Mercosur (Southern Common Market) as a growing market for European cars, machinery, and chemical products, as well as a reliable source of essential minerals for Europe’s green transition, such as lithium used in batteries, an area in which Europe is currently dependent on China. They also point to agricultural benefits, as the agreement would provide greater access and lower tariffs for EU exports of cheese, ham, and wine.
Two texts are expected: a provisional one, emphasizing trade aspects, and a definitive version.
A threat to industry
The market opening promised by the EU–Mercosur agreement would affect Brazil’s industrial policy goals, according to experts interviewed by BdF.
“It is still unclear how a number of issues will be handled, issues that Brazil, during Lula’s first terms and under Dilma Rousseff, viewed with great concern, particularly government procurement and the risk of predatory industrial practices, and what barriers will actually be put in place,” said political scientist and international relations professor Gilberto Maringoni of the Federal University of ABC (UFABC) in an interview with BdF.
“Germany will increase its exports, especially automobiles, putting Brazil’s domestic auto industry in serious trouble. With lower or no taxes, these vehicles arrive at much lower prices due to the productivity of German industry. Under those conditions, there is no reason for Brazil to maintain an automotive industry or to negotiate with China to bring new industrial plants here,” he explained.
Giorgio Romano Schutte, professor of International Relations and Economics at UFABC and a member of the Observatory of Brazilian Foreign Policy and International Insertion, told BdF that the text was “carefully negotiated by neoliberals under the governments of Macri, Temer, and Bolsonaro, and supposedly improved, but not enough, under the Lula administration.”
“What Brazil lacks is a comprehensive policy with bold initiatives and clear rules to advance the promised new industrial policy, whose general outlines were announced in 2023. It is urgent to encourage productive investment and to advance the generation of endogenous industrial and technological capacity. Ultimately, this strategy should define the parameters of negotiations with partners, not the other way around.”
“There is, in fact, ample room to strengthen and qualify relations with European partners around agendas aligned with the Lula government’s priorities, without necessarily depending on this agreement,” he added, citing agreements signed between Brazil and Germany in 2023 focusing on energy, environmental transition, and technological cooperation.
Expansion of deforestation
European organizations and left-wing activists also believe the agreement will accelerate deforestation in the Amazon and worsen the climate crisis by increasing greenhouse gas emissions. Greenpeace has described the text as “disastrous” for the environment, while Via Campesina accuses the deal of violating national sovereignty.
In 2024, rural movements linked to Via Campesina publicly rejected the agreement in a statement urging Lula to “listen to the cry of the peoples of the countryside, waters, and forests, put an end to the ongoing negotiations, and make room for the construction of a popular project of national development for Brazil.”
“The agreement under discussion represents a setback for Brazil and Mercosur countries in terms of socioeconomic development, as well as a direct attack on our countries’ sovereignty,” the statement said. Popular movements emphasized that the agreement “was rejected more than 20 years ago” and that the current text, revived in 2019, reflects “Bolsonarista DNA in its essence, with no commitment to the development of our country.”
“The agreement takes on neocolonial characteristics in its conception and threatens our peoples and territories, threatens peasant agriculture and traditional communities, and hands over our common goods to the interests of international capital, consolidating the agro-export model of our economy, essentially continuing to export raw materials to meet European demand in exchange for industrialized products.”
According to Via Campesina, market deregulation, free trade agreements, and particularly the negotiation of the EU–Mercosur free trade deal are among the main causes of the severe crisis currently facing European farmers.
