Free trade with Latin America
The long road of Mercosur agreement

As of: January 17, 2026 1:23 p.m

EU Commission President von der Leyen signs the Mercosur agreement in Paraguay. After 26 years of negotiations, this marks an important step – but far from the end.

Ursula von der Leyen is finally allowed to sign the document that will create the world’s largest free trade zone with 700 million consumers. Not in Brasilia, as originally planned shortly before Christmas, but in Asunción, Paraguay. The Italian Prime Minister Giorgia Meloni once again asked for improvements and a few weeks more time.

The conclusion of the trade agreement with the four Latin American countries – Argentina, Brazil, Paraguay and Uruguay – is a sign that many have been eagerly waiting for after 26 years of negotiations, especially industry, crafts and parts of agriculture.

But also resistance from agriculture

“We cannot survive without exports,” says Secretary General of the European Wine Industry Association (CEEV) Ignacio Sánchez Recarte. Almost every fourth wine leaves the EU. The main producers are Italy, Spain and France. But of all places, resistance to Mercosur is greatest in France. The Mercosur agreement is not supported by any party there, from the left to the far right.

“We are not against free trade agreements. The situation is just that we are going to war with air pistols against people who have Kalashnikovs,” is how Jérôme Bayle puts it martially. The southern Frenchman is one of the leaders of the farmers’ protests. He and many other farmers complain that pesticides and antibiotics that are not allowed in Europe can be used in Latin American countries.

Measures should eliminate criticism

Proponents of the agreement counter that an additional safety net was created specifically for farmers to protect them. Tariffs can be reintroduced if the pressure on prices becomes too extreme. Aid should be paid out more quickly than planned. In addition, only a small portion of the beef and poultry consumed by Europeans each year is imported at lower tariffs. For beef there are around 99,000 tonnes at 7.5 percent, which amounts to just 200 grams per EU resident per year.

The Secretary General of the European wine industry, Sánchez, says that reporting often shortens that agriculture is against the free trade agreement: “We have no objections at all to this agreement. It represents a fundamental opportunity to boost and diversify our export business.”

Almost a third of wine exports, 28 percent, go to the United States, where tariffs have recently been increased dramatically. The Mercosur area will not replace the US market. The USA imports 25 times as much wine from the EU. But winegrowers, like many other industries, are looking for new sales markets in order to become more independent.

Trademark protection as Competitive advantage

The European dairy industry also sees a great opportunity in the Mercosur area, says the Secretary General of the industry association Alexander Anton in the ARD Europa podcast punktEU. He mentions the protected names for over 350 foods: “For example, for Italy it’s Parmesan, for France it’s Comté and for Bavaria it’s Allgäu Emmental or Allgäu mountain cheese.”

These brand names can also establish themselves in Latin America – just like machines and cars from Germany. The EPP chairman Manfred Weber advertised in his Bavarian homeland that BMW and Audi could now sell more in Latin America. Weber spoke of an “anti-Trump agreement.”

This geopolitical argument is also emphasized by some European leaders and MEPs, such as the Chairman of the Trade Committee in the EU Parliament, Bernd Lange (SPD): “In a world where the law of the strongest seems to be gaining in importance, it is so important to enter into a fair partnership.

“Resistance also in the EU Parliament

However, the Mercosur agreement continues to face a lot of headwind, not only from protesting farmers in France and Poland. The resistance extends to the German Greens. MEP Anna Cavazzini says von der Leyen has “a very weak mandate” to sign. The President of the Commission only pushed the contract through the European Council with a lot of fuss.

In addition to the concerns of agriculture, Cavazzini cites a lack of climate protection, the extraction of rare resources and the deforestation of the rainforest as reasons why she is not convinced by the agreement. The Green politician and over 150 other MEPs want the European Court of Justice in Luxembourg to examine whether the agreement is compatible with the European Treaties.

Possibly years of delays

The plenary session will decide on the application next Wednesday. Such an examination could take a good two years. Critics of the agreement hope this will provide a reprieve. However, the Mercosur agreement could be applied provisionally during this time if Parliament also agrees to it.

Incidentally, all of this only relates to the trade part of the agreement. The political partnership agreement must also be approved by the national parliaments. As strange as it sounds: Von der Leyen’s signature does not mean the conclusion of Mercosur.