Italy plans to back Mercosur, paving way for new EU trade deal
The pact will create a market of 780 million consumers, and allow both blocs to diversify away from the US
[BRUSSELS/ROME] Italy plans to back the Mercosur free trade agreement (FTA) with a South American bloc of countries, in a vote that will likely be the final major hurdle for the European Union to clinch the accord, which has been in the works for 25 years.
Italy is expected to reverse course and support the deal when EU ambassadors vote on the measure on Jan 9, said people familiar with the matter.
This would allow the EU to sign the treaty with the Mercosur countries – Brazil, Argentina, Uruguay and Paraguay – on Jan 12.
A spokesperson from the Italian government declined to comment. Nothing has been finalised, and the plans could still change.
The EU failed to finalise the FTA last month after Italy and France led a campaign to delay it, arguing it still lacked appropriate protections for Europe’s farmers.
Prime Minister of Italy Giorgia Meloni had been seeking extra safeguards for the agricultural industry, as well as additional funds for farmers from the bloc’s budget, said the sources, who spoke on the condition of anonymity.
“There have been discussions, work and progress during the past two weeks,” said European Commission spokeswoman Paula Pinho in Brussels on Monday (Jan 5). “We are on the right path to consider signing, hopefully soon.”
Last month, French President Emmanuel Macron, who has come under domestic pressure from farmers, argued that the treaty did not provide adequate safeguards.
Over the weekend, Prime Minister Sebastien Lecornu said that France planned to prohibit food imports from South America or elsewhere, that contain pesticides banned for use in the EU.
The proposed accord is the largest ever negotiated by the EU. For more than two decades, talks have perpetually paused and restarted, as officials tried to appease concerns over both environmental protections and agrifood standards for the Mercosur bloc.
The EU-Mercosur trade pact would create an integrated market of 780 million consumers, gradually erasing tariffs on goods including cars, and giving Europe easier access to Mercosur’s vast agricultural industry.
The deal would allow both regions to diversify away from the US after US President Donald Trump imposed global tariffs.
Bloomberg Economics has estimated that the deal would boost the Mercosur bloc economy by up to 0.7 per cent and Europe’s by 0.1 per cent.
Geopolitically, it would also strengthen the EU’s footprint in a region where China has emerged as a major industrial supplier and commodities purchaser. BLOOMBERG
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