Mercosur and EU – A Long-Awaited Free Trade Agreement on the Horizon?

The Mercosur summit in Uruguay could become a decisive moment for the long-awaited free trade agreement with the European Union. While Germany and Spain are particularly pushing for an agreement, they are in intense contention with France, which remains opposed due to the impact on European agriculture. Last week, virtual negotiations took place, indicating the possibility that EU Commission President Ursula von der Leyen might travel to Montevideo should an agreement be reached. The final conclusion of the agreement still seems uncertain. Mauricio Lyrio from the Brazilian Ministry of Foreign Affairs reports significant progress in the negotiations so far. However, a spokesperson for the European Parliament pointed to intra-European hurdles that complicate reaching an agreement. France, along with Poland and other EU countries, has formed an opposing front that unites at least 35% of the EU population to block the agreement. In contrast, there is an alliance of eleven supporters within the EU who want to push for a diversification of trade routes. If the agreement comes to fruition, it will still take months for its legal and linguistic formulation to be completed. An agreement could dampen any plans of the new Argentine president Javier Milei, who has advocated for more flexible trade contracts and a potential withdrawal from Mercosur. Developments in Montevideo remain in focus and once again highlight the complexity of international trade negotiations. The balance between progress and protectionism, between cooperation and self-interest, is hard to articulate—thus, it remains unclear for now whether this historic agreement will finally become a reality.