EU Set to Sign Landmark Mercosur Trade Deal as von der Leyen Hails ‘Historic’ Breakthrough
The European Union has cleared the way for the signing of a long-awaited trade agreement with South America’s Mercosur bloc, with European Commission President Ursula von der Leyen describing the pact as “historic” and saying she looks forward to its formal signing in the coming days.
A majority of the EU’s 27 member states backed the deal at a meeting of ambassadors in Brussels on Friday, overriding opposition led by France. The decision paves the way for the agreement to be signed in Paraguay next week, diplomatic sources confirmed.
Negotiated over more than 25 years, the EU-Mercosur accord is seen by supporters as a key step to boost exports, strengthen Europe’s struggling economy and deepen diplomatic ties at a time of global economic uncertainty. Von der Leyen confirmed she would travel to Paraguay for the signing, though she did not give a specific date.
“This historic trade deal is further proof that Europe charts its own course and stands as a reliable partner,” the Commission chief said. Argentina’s foreign minister later announced that the agreement would be signed on January 17.
German Chancellor Friedrich Merz also welcomed the breakthrough, calling the approval “a milestone in European trade policy” and an important signal of the bloc’s strategic autonomy and ability to act.
The agreement will create a free trade area covering more than 700 million people, linking the EU with Brazil, Argentina, Paraguay and Uruguay. It will remove tariffs on more than 90 percent of traded goods and is expected to save EU companies around €4 billion annually in duties, while boosting exports of vehicles, machinery, wines and spirits to Latin America.
The deal is also part of a broader EU effort to diversify trade ties amid rising protectionism, US tariffs and tensions with China. Analysts say it could help reduce Europe’s dependence on China for critical raw materials.
However, the pact has sparked strong opposition, particularly from farmers in France and several other European countries, who fear being undercut by cheaper agricultural imports such as meat, sugar, rice, honey and soybeans. Protests erupted across Europe this week, with farmers staging demonstrations in France, Italy, Belgium and Poland.
France, along with Ireland, Poland, Hungary and Austria, voted against the agreement, but their opposition was not enough to block it after Italy shifted its position in favour following last-minute concessions.
To address concerns, the European Commission has promised safeguards, including a €6.3 billion crisis fund and mechanisms to suspend preferential tariffs if imports surge and threaten EU farmers. It also said the deal would boost EU agri-food exports to South America by up to 50 percent and protect more than 340 iconic European products from imitation.
Italian Prime Minister Giorgia Meloni said the final balance struck was “sustainable” and expressed hope that the agreement would deliver broad benefits, despite acknowledging the anger among farmers.
The trade deal still requires approval from the European Parliament before it can fully enter into force.
