Berliner Boersenzeitung - Mercosur meets in Brazil, EU eyes January 12 trade deal

Argentina, Brazil, Paraguay and Uruguay had hoped they would on Saturday finally seal a deal with the EU to create the world's largest free trade zone.

However, the deal, which has been under negotiation for more than 25 years, met with fierce opposition from farmers, notably in France and Italy, and has now been postponed to January.

Several diplomats in Brussels told AFP the EU was working towards a signature on January 12 in Paraguay, which is set to take over leadership of Mercosur from Brazil in 2026.

European Commission chief Ursula von der Leyen said she was confident there would be a "sufficient majority" among the EU's 27 countries to approve the deal next month.

The trade deal would help the 27-nation European Union export more vehicles, machinery, wines and spirits to Latin America.

In return, it would facilitate the entry into Europe of South American meat, sugar, rice, honey and soybeans.

Some EU nations, like Germany, Spain and the Nordic countries, are excited about a pact that could help boost exports at a time of global trade tensions.

- Angry farmers delay pact -

The proposed deal has provoked anxiety among farmers in Paris and Rome who fear they will be undercut by a flow of cheaper goods from agricultural giant Brazil and its neighbors.

Thousands of farmers protested the deal outside a Brussels meeting of EU leaders on Thursday, rolling around 1,000 honking tractors into the city.

Protesters lit fires and hurled potatoes and other objects at the police who responded with tear gas and water cannon.

The demands for more robust protections forced the European Commission to announce a postponement of Saturday's planned signing ceremony.

Lula on Wednesday warned the EU to sign the deal now or forget it while he was in power.

However, he said Thursday that Italian Prime Minister Giorgia Meloni had asked him for "patience" and indicated Rome would eventually be ready to sign.

After the Brussels summit, French President Emmanuel Macron said it was "too soon" to say if Paris would back the deal next month, saying fundamental changes to the text were needed.

A Brazilian government source said the trade pact already contained safeguards for EU farmers, but "we see that the internal political situation in France is delicate," the source added.

On Friday, dozens of French farmers protested in front of President Emmanuel Macron's seaside residence, spreading manure nearby to demonstrate the Mercosur trade deal and other grievances.

- Germany upbeat -

Despite the delay, German Chancellor Friedrich Merz is "very happy, because the question is no longer if (the deal will be signed) but when", government spokesman Sebastian Hille told reporters in Berlin.

He said the German government expected the process to be completed "in the next two to three weeks."

The Mercosur meeting starts Friday with ministerial talks in southern Brazil's Foz de Iguacu -- home to one of the world's largest waterfall systems on the border with Argentina.

On Saturday, Brazil's President Luiz Inacio Lula da Silva will meet his Uruguayan counterpart Yamandu Orsi, Paraguay's Santiago Pena, and Argentina's libertarian firebrand President Javier Milei.

Milei sparked controversy this week with a viral Instagram post showing a map of South America depicting Brazil as a massive slum, while Argentina and Chile -- which just elected a far-right leader -- are shown as futuristic.

(A.Berg--BBZ)