The European Union and South America's Mercosur bloc announced a long-awaited free trade agreement, concluding 25 years of negotiations. European Commission President Ursula von der Leyen, speaking in Montevideo alongside her Mercosur counterparts, called the deal a ‘political necessity’ amid rising global protectionism.
The agreement aims to reduce EU reliance on China and shield the bloc from potential US trade tariffs. However, it faces significant hurdles, requiring legal formalization and approval from EU member states. France leads opposition, citing environmental and agricultural concerns, with French farmers fearing competition from South American imports.
The updated pact includes amendments on public procurement, auto trade, critical minerals, and environmental safeguards to address South American concerns. Brazilian President LuizInacio Lula da Silva welcomed the milestone but noted challenges ahead. Paraguayan President Santiago Pena echoed this caution, highlighting the need for further work.
Supporters, including Germany and Spain, argue the deal diversifies EU trade and bolsters its green transition. Critics, like France and Italy, remain steadfast in their objections. Approval requires backing from 15 EU states representing 65 per cent of the population and a simple majority in the European Parliament, leaving its future uncertain.
