EU delays massive free-trade deal with South American countries

(AP) — The European Union (EU) is delaying a massive free-trade deal with South American countries after fiery protests by farmers and last-minute opposition by France and Italy threatened to derail the pact. The deal is seen by its backers as an important geopolitical move for both continents.

Top EU officials had hoped to sign the EU-Mercosur deal in Brazil this weekend, after 26 years of negotiations. Instead, European Commission chief spokesperson Paula Pinho confirmed that the signature had been put off until January.

Experts say the delay could dent the EU’s negotiating credibility globally as it seeks to forge new trade ties amid commercial tensions with the United States and China.

Once ratified, the trade deal would cover a market of 780 million people and a quarter of the globe’s gross domestic product, and progressively remove duties on almost all goods traded between the two blocs.

French farmers unions, who fear the deal would undercut their livelihoods, welcomed the postponement. France had led opposition to the deal between the EU and the five active Mercosur countries — Brazil, Argentina, Uruguay, Paraguay and Bolivia. Italy raised new reservations Wednesday.

Thursday's agreement for a delay was reached between European Commission President Ursula von der Leyen and European Council President Antonio Costa on the sidelines of an EU summit with Italian Premier Giorgia Meloni, on the condition that Italy would vote in favour of the agreement in January, an EU official said.

The decision came hours after farmers in tractors blocked roads and set off fireworks in Brussels to protest the trade deal, prompting police to respond with tear gas and water cannons.

The farmers brought potatoes and eggs to throw and waged a furious back-and-forth with police. Protesters burned tires and a faux wooden coffin bearing the word “Agriculture.” Their fire unleashed a black cloud that swirled with white tear gas. The European Parliament evacuated some staff due to damage caused by protesters.

“We are fighting to defend our jobs,” said Armand Chevron, a 23-year old French farmer.

Supporters say the EU-Mercosur deal would offer a clear alternative to Beijing's export-controls and Washington's tariff blitzkrieg, while detractors say it will undermine both environmental regulations and the EU's iconic agricultural sector.

German Chancellor Friedrich Merz said ahead of the Brussels summit that the EU's global status would be dented by a delay or scrapping of the deal.

“If the European Union wants to remain credible in global trade policy, then decisions must be made now,” Merz said.

The deal is also about strategic competition between Western nations and China over Latin America, said Agathe Demarais, a senior fellow at the European Council on Foreign Relations. “A failure to sign the EU-Mercosur free trade agreement risks pushing Latin American economies closer to Beijing’s orbit,” she said.

The political tensions that have marked Mercosur in recent years — especially between Argentina’s far-right President Javier Milei and Brazil’s center-left Luiz Inácio Lula da Silva, the bloc’s two main partners — have not deterred South American leaders from pursuing an alliance with Europe that will benefit their agricultural sectors.

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