Ursula von der Leyen and the leaders of Mercosur nations are expected to announce the political agreement during a Summit in Montevideo, Uruguay
After over 20 years of negotiations and 5 years since an initial agreement, the European Union (E.U.) and South America’s Mercosur bloc are poised to finalize a free trade deal.
The President of the European Commission – Ursula von der Leyen met the leaders of Mercosur nations. They are expected to announce the political agreement during a Summit in Montevideo, Uruguay.
The Southern Common Market, commonly known by the Spanish abbreviation Mercosur, is a South American trade bloc established by the Treaty of Asunción in 1991 and the Protocol of Ouro Preto in 1994. Its full members are Argentina, Bolivia, Brazil, Paraguay and Uruguay. Venezuela is a full member but has been suspended since 1st December 2016. It’s associate countries are Chile, Colombia, Ecuador, Guyana, Peru, and Suriname.
This long-awaited deal could significantly boost trade between the two regions. It would provide E.U. companies with access to Mercosur’s vast market for cars, machinery, and chemicals while reducing tariffs on South American agricultural exports like beef. It would also offer European producers’ greater access to the Mercosur market for cheese.
Taking it to X, the President of the European Commission – Ursula von der Leyen, tweeted,
Touchdown in Latin America📍
— Ursula von der Leyen (@vonderleyen) December 5, 2024
The finish line of the EU-Mercosur agreement is in sight.
Let’s work, let’s cross it.
We have the chance to create a market of 700 million people.
The largest trade and investment partnership the world has ever seen.
Both regions will benefit.
She further tweeted,
Got the chance to listen to the insights of European companies in Uruguay.
— Ursula von der Leyen (@vonderleyen) December 6, 2024
For them, the business case for EU-Mercosur is very clear.
Tariff cuts, simpler procedures, access to public contracts…
All of this means so much more opportunities for jobs and growth in Europe.
Ursula flew in on Thursday, i.e., 4th December’24 ahead of the planned Summit of the bloc, which will include farming powerhouses Brazil, Argentina, Uruguay, and Paraguay. This was just hours after the French President Emmanuel Macron’s Government collapsed.
However, the agreement faces steep opposition within Europe. France, the deal’s most vocal critic, labelled it “unacceptable,” citing concerns about its impact on European farmers and environmental standards. French farmers fear that the influx of South American commodities, particularly beef, would undercut EU products that adhere to stricter green and food safety standards. Italy and Poland have also expressed reservations, further complicating the deal’s path to approval.
Conversely, a group of EU members, including Germany and Spain, say the deal is vital for the bloc as it looks to diversify its trade after the near-closure of the Russian market and discomfort about reliance on China. They see Mercosur as a market for E.U. cars, machinery, and chemicals and a potentially reliable source of critical minerals, such as lithium batteries, which are required for Europe’s green transition.
The trade agreement would require approval from 15 of the 27 E.U. members representing 65% of the E.U. population along with a simple majority in the European Parliament.
