The EU seals the Mercosur agreement in Paraguay despite opposition from the peasantry

BrusselsThe European Union continues to move towards the final ratification of the trade agreement with MercosurDespite opposition from farmers, some member states, and a significant portion of the European Parliament, which has yet to give its final approval, the European Commission President, Ursula von der Leyen, and the President of the European Council, António Costa, signed the trade pact in Asunción on Saturday with the President of Paraguay and the leaders of Argentina, Uruguay, Bolivia, and Panama. Brazilian President Lula da Silva and Von der Leyen had already shaken hands at an event in Brazil on Friday. All the leaders praised the pact and agreed that it was "historic." Even Paraguayan President Santiago Peña, who had previously been rather critical, endorsed it. Argentine President Javier Milei also expressed his full support but took the opportunity to congratulate Italian President Giorgia Meloni, although he threatened at the last minute to prevent the signing of the pact.

Furthermore, the Argentine president contrasted the "openness to the world" and "freedom" that a trade agreement like the EU-Mercosur one represents with the Venezuelan regime, and defended the United States' attack on Venezuela. "We applaud Trump's actions in Venezuela, which led to the capture of the narco-terrorist Nicolás Maduro," Milei said. Conversely, the President of the European Council subtly criticized the Trump administration, saying that "while some are putting up barriers," the EU and Mercosur are "building bridges."

The signing of the pact comes at a time when the EU is losing allies: first Russia and now the United States under Donald Trump. Moreover, Chinese competition is growing, and tensions with the Asian giant are also on the rise. Therefore, despite strong opposition from farmers across the continent, a majority of member states, as well as EU leaders, consider it crucial to find new, reliable trading partners. This position is also shared by Spain, one of the European club's partners that has most strongly advocated for the agreement's completion, and by the Catalan government. This majority has managed to overcome the reluctance of the main opposing country: France. Paris, in line with the primary sector, fears that the agreement will harm the agricultural and livestock industry. Finally, Italy's change of position was key; at the last minute, it decided to vote in favor in exchange for concessions such as measures to lower fertilizer prices and the advance payment of Common Agricultural Policy (CAP) subsidies. With Italy's approval, the necessary qualified majority was achieved for the EU Council to ratify the agreement.

Panamanian President José Raúl Mulino has been reminded of the opposition from leaders of countries like France, who particularly reject beef imports. "If we brought these leaders here with a good barbecue, they would be the first to want to import this delicacy, accompanied by the great wines they produce," the Panamanian leader said.

The European Parliament still has the final say

However, the European Parliament's animosity towards the trade agreement is growing, which could complicate its implementation. In fact, the European Parliament has decided to put to a vote in plenary session next Wednesday whether to refer the agreement to the Court of Justice of the European Union (CJEU), arguing, among other things, that it limits the inclusion of new environmental and health requirements for products imported from Mercosur. This complaint aims to further hinder the agreement, which has been under negotiation for over a quarter of a century. Should the European Parliament vote to send the agreement to the CJEU, the vote in the European Parliament would be postponed, and therefore its final ratification, which was scheduled for the spring. However, the European Commission maintains that the agreement can enter into force temporarily before receiving final approval from the European Parliament, although it currently rules this out. That said, if the MEPs reject it, the agreement will cease to be in effect.

Winners and losers

The European Union claims this is the largest free trade agreement the bloc has ever signed, creating a single market of over 780 million people. Brussels estimates it will save Europeans around €4 billion in tariffs and sees this as positive for its industry. Geopolitically, it also views it as beneficial for reducing dependence on China, particularly for critical materials, and on the United States, which is increasingly distancing itself from EU interests. Furthermore, the European bloc asserts that the agreement already contains clauses protecting the European primary sector.

The Spanish government is also a strong supporter of the Mercosur agreement, both for its trade ties and its cultural and historical connections, and the Catalan government sees it as an opportunity to increase Catalan exports. According to the Catalan Ministry of Agriculture, the current trade surplus between Catalonia and Mercosur is 105%. "We want to maintain and expand it," stated the Minister of Agriculture, Òscar Ordeig. It's worth noting that, on the one hand, both Catalonia and the EU as a whole export a large quantity of agri-food products, such as olive oil and wine, as well as pharmaceuticals and industrial goods, among others. On the other hand, farmers fear competition from Mercosur in the beef and poultry sectors at a time when the industry is already facing significant challenges.