Meloni asks for more time and the EU postpones the agreement with Mercosur

BrusselsNegotiations for the trade agreement between the European Union and Mercosur –Argentina, Brazil, Uruguay, Paraguay and Bolivia– began 25 years ago, and when It looked like it was already closed.Italy has joined the group of reluctant member states, causing another postponement. European Commission President Ursula von der Leyen and European Council President António Costa were scheduled to travel to Iguazu Falls, Brazil, this weekend to stage the signing with the leaders of the Latin American alliance. However, EU officials have now announced to the European Council meeting this Thursday in Brussels that they have postponed the trip, according to EU sources. Italy had already given the green light to the trade agreement with Mercosur, but at the last minute requested more time, and diplomatic sources indicate that Meloni claimed he wanted to speak with Italian farmers. It should be noted, however, that the Italian government is divided: one faction, led by Antonio Tajani (of the European People's Party), is in favor, while the other, led by the far-right Matteo Salvini, is opposed.

Faced with Italian reluctance, Latin American leaders had already begun to lose patience. Brazilian President Lula da Silva had been the most hardline, asserting that if the pact wasn't sealed this weekend, Brazil would not sign it while he was president. However, after a series of talks with Meloni, the Brazilian leader softened his stance, hoping that Rome would finally give its approval in January and the European Union could ratify the agreement, according to diplomatic sources.

Italy holds the key

France and Poland, both partners with the most powerful agri-food industries on the blog, have always been opposed. The pact will remove tariffs on 91% of products and argues that, for example, opening up to the Argentine beef market could harm the competitiveness of the European meat sector. These two states—plus other smaller ones, like Austria—on their own do not constitute a large enough minority to defeat the agreement, but Italy's support would prevent it from reaching the required qualified majority in the EU. Therefore, Italy's position is crucial.

Conversely, Pedro Sánchez has lamented the reluctance of countries like France and Italy's last-minute doubts, and stated before entering the European Council that it would be "very frustrating" if the pact were to fall apart. In this regard, the Spanish president has reiterated the importance of this agreement, both for "historical and cultural" as well as "commercial" reasons, and has emphasized that it would forge alternative alliances that strengthen autonomy and reduce dependence on the European bloc, especially after the break with Moscow and the return of Donald Trump. However, Spanish diplomatic sources have expressed optimism about the agreement and downplayed the possibility of another postponement.

It's important to remember that this is the largest free trade agreement the EU intends to sign with an ally. The pact will create a joint market of over 780 million people and is estimated to save Europeans around €4 billion in tariffs, according to data from the European Commission itself.

Brussels and the member states most in favor of an understanding with Latin American allies also believe that this agreement would allow the European Union to gain autonomy and reduce its dependence on other powers, especially the United States and China. In fact, the pact gained renewed momentum following the war in Ukraine and the realization of the danger of depending on a single partner in any area, as was the case with Russia and its fossil fuels.