A majority of European Union countries have given the initial green light to the signing of the free trade agreement between the European Union and Mercosur, the South American bloc comprising Brazil, Argentina, Uruguay, and Paraguay. The approval came during a meeting of Coreper, the Committee of Permanent Representatives of the 27 member states, convened in Brussels.
The ambassadors confirmed the agreement reached with the European Parliament on the trade agreement's safeguard clauses, but introduced a significant change: the threshold triggering investigations on sensitive agricultural products in the event of potential market disruptions has been lowered from 8% to 5%. This change is designed to strengthen the EU's response capacity and address the concerns of the agricultural sector.
According to the results of the vote, France, Poland, Austria, Hungary, and Ireland voted against, while Belgium abstained. Italy's vote in favor was crucial in reaching the qualified majority needed to advance the dossier. The written procedure initiated after the Coreper meeting is expected to lead to final approval this afternoon.
The EU-Mercosur agreement, once signed, will create the world's largest free trade area, involving over 700 million consumers. The text provides for the progressive elimination of tariffs on 91% of trade between the two areas. Currently, tariffs applied by Mercosur countries to European goods range up to 35% on cars, 20% on industrial products, 18% on chemicals, and 14% on pharmaceuticals.
The reduction of customs barriers should significantly benefit European exports of industrial, chemical, pharmaceutical, automotive, and component goods. In return, the South American bloc will receive concessions on agricultural exports, particularly for beef, rice, sugar, and bioethanol—sectors considered sensitive by many member states.
The next steps include the formal signing of the treaty: European Commission President Ursula von der Leyen is expected to travel to Paraguay, the country that holds the rotating presidency of Mercosur, on Monday, January 12, to sign the agreement.
The economic benefits for European industry are significant. According to the Commission's estimates, the agreement will save EU companies approximately four billion euros in duties per year. It also provides for simplified customs procedures, improved access to public procurement in Mercosur countries, and preferential access to certain critical raw materials.
The potential benefits for Italy are also significant. Confindustria (the Italian Industrialists' Federation) notes that Mercosur is already worth approximately €14 billion to Italian exports. Federmacchine (the Italian Federation of Industrialists) calls the agreement a strategic opportunity of primary importance for the mechanical engineering, technology, and the entire Made in Italy sector. An impact analysis commissioned by the Ministry of Foreign Affairs in 2021 estimates that by 2036, overall EU exports of goods and services would increase by approximately $25 billion, with Italy as the main beneficiary among the 27 member states, accounting for 14% of the total, or approximately $3,5 billion.
On the agri-food front, Brussels emphasizes the opportunities for high-quality European products such as wines, cheeses, chocolate, and pork, currently subject to high tariffs. The agreement will also recognize 344 European geographical indications, prohibiting imitations and the use of misleading symbols or names.
However, resistance remains strong from the agricultural sector. European farmers fear competition from South American products, particularly sugar, beef, poultry, and corn, and warn of the risk of imports that do not meet EU environmental and health standards.
To address these concerns, the Commission has strengthened safeguards. In addition to lowering the threshold for initiating investigations into sensitive products, Ursula von der Leyen promised to immediately allocate increased resources for the future Common Agricultural Policy, estimated at around €45 billion. This commitment helped convince Rome to support the agreement.
Despite this, protests continue, especially in France. Tensions remain high in Italy as well: in Milan, several thousand farmers and ranchers, arriving from across the country aboard about a hundred tractors, occupied Piazza Duca d'Aosta to demonstrate against the EU-Mercosur agreement, signaling that the debate over the agreement is far from over.
