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Commission President Ursula von der Leyen on Thursday postponed the signing of the controversial Mercosur agreement until January following tense negotiations between the 27 member states, sparking dissatisfaction in its supporters Germany and Spain.
The trade deal dominated the EU summit, with France and Italy calling for a postponement to ensure stronger protections for farmers, but von der Leyen had hoped to secure support from member states before heading to Latin America for a signing ceremony on December 20.
Without approval, the ceremony cannot proceed. There is no date specified.
“The European Commission has proposed postponing the signature to early January for further consultations with countries who still need more time,” an EU official told reporters.
After a phone call with Brazilian President Luiz Inacio Lula da Silva, Prime Minister Giorgia Meloni said he supported the deal, but added that Rome still needed stronger guarantees for Italian farmers. In separate comments, Lula said Meloni promised the trade deal would be approved within the next 10 days to a month.
The Mercosur agreement would create a free trade area between the EU and Argentina, Brazil, Paraguay and Uruguay. But European farmers are concerned that they will face unfair competition from imports from Central and South America in terms of prices and practices.
Meloni’s decision was crucial to the delay
“The Italian government is ready to sign the agreement as soon as it has given farmers the answers they need. This will depend on the decision of the European Commission and it will be possible in the short term,” Meloni said after a meeting with Lula, who had threatened to pull out of the deal if no agreement was found this month. After speaking with Meloni, he became even more conciliatory.
Talks between EU leaders stalled as supporters of the deal, which is due to be signed in 2024 after 25 years of negotiations, argued that the Mercosur deal was essential because Mercosur needed new markets as its largest trading partner, the United States, pursued aggressive tariff policies. Tariffs on European exports to the United States have tripled under Donald Trump’s administration.
“This is one of the most difficult EU summits since the last long-term budget negotiations two years ago,” said one EU diplomat.
Last Sunday, France began calling for the vote to be postponed amid anger from farmers.
Paris has long opposed the deal, demanding strong protections for farmers and reciprocity on environmental and health production standards with Mercosur countries.
This agreement requires approval by a qualified majority. France, Poland and Hungary have opposed the signature, while Austria and Belgium plan to abstain if a vote is held this week. Ireland has also expressed concerns about protecting farmers.
Italy’s position was extremely important.
But supporters of the deal now fear that prolonged hesitation could lead to Mercosur countries permanently leaving decades of negotiations.
After his meeting with Meloni, Lula said he would pass on Italy’s request to Mercosur, which could then “decide what to do.”
EU officials said contacts with Mercosur were “ongoing”, adding: “We need to make Mercosur receptive to everything.”