European Union member states have backed the biggest ever free trade agreement with a group of Latin American countries, ending 25 years of negotiations but stoking further tensions with farmers and environmentalists around the bloc.
The contentious Mercosur deal with Argentina, Brazil, Paraguay and Uruguay prompted immediate protests in Poland, France, Greece and Belgium, with farmers blocking key roads in Paris, Brussels and Warsaw.
Opposition parties in France from the far left and the far right also seized on the deal, agreed in principle on Friday, to try to topple Emmanuel Macron’s government with a motion tabled for a vote of no confidence.
The member state approvals end months of wrangling in Brussels and a last-minute hitch before Christmas when Italy’s opposition threatened to collapse the deal.
France, Poland, Austria, Ireland and Hungary voted against while Belgium abstained. Italy’s Giorgia Meloni, long seen as a key vote, backed it, allowing the landmark deal to be adopted under qualified majority voting rules.
The European parliament must approve the deal to bring it into force, but as trade falls within the exclusive competence of the European Commission, its head, Ursula von der Leyen, is expected to travel to Paraguay on Monday to formally sign the agreement.
Von der Leyen said the EU had listened to farmers, describing the deal as a “win-win agreement” yielding a €50bn opportunity to EU exporters by 2040 and €9bn growth to Mercosur countries. She also vowed to step up import controls to ensure EU standards on meat and other farm produce imports were upheld.
Supporters of the deal say it will help deepen the EU’s economic cooperation with the global south, where China is already seeking alliances in the wake of the disruption Donald Trump has caused to the international trade order.
It will also help the EU wean itself off China for critical minerals and rare earths vital for the auto and tech sectors as these elements are abundant in the Mercosur countries.
Brazil accounts for about 20% of the world’s reserves of graphite, nickel, manganese and rare earths. But it also holds 94% of global reserves of niobium, a metal used in the aerospace industry, while Argentina is the third largest producer of lithium, a material used in batteries in electric vehicles.
“The deal is not only about economics. Latin America is a region of intense competition for influence between western countries and China. Failing to sign the EU-Mercosur free trade agreement risked pushing Latin American economies closer to Beijing’s orbit.
“The conclusion of the deal also signals that Europeans are serious about diversifying their export markets away from the US,” said Agathe Demarais, senior policy fellow at the European Council on Foreign Relations, a leading thinktank.
Farmers in beef, poultry and grain sectors claim they are collateral damage. “This will kill our agriculture in Poland,” Janusz Sampolski, a Polish farmer, told Agence France-Presse. “We will be dependent on supply chains from other countries,” he said, adding that it could threaten Poland’s food security “in the event of the threat of war”.
The Climate Action Network said the deal was not only about tariffs and quotas but would “drive deforestation” and “worsen human rights conditions in some of the world’s most sensitive ecosystems” with incentives to farm more beef and soy and timber for paper in deforestation-prone areas.
