Green light for EU-Mercosur free trade: the controversial agreement passes, the tractors take to the streets

After a quarter of a century of intermittent negotiations, postponements and crossed vetoes, the free trade agreement between the European Union and Mercosur has overcome the first, decisive, political obstacle. The green light came on January 9th from Coreper, the committee of permanent representatives of the 27 member states. A qualified majority paved the way for the signing of the agreement, which now awaits the final formal steps and discussion with the European Parliament.

The vote split Europe. Italy, Germany and Spain supported the agreement; France, Poland, Austria, Hungary and Ireland voted against; Belgium abstained. Rome’s yes was crucial to reaching the necessary numbers. It is not a political detail: the agreement creates the largest free trade area in the world, with over 700 million people between Europe and Latin America.

What Mercosur is and why it matters for the EU

Born in 1991 with the Treaty of Asunción, the Mercado Común del Sur brings together Argentina, Brazil, Paraguay and Uruguay with the aim of integrating their economies through a customs union and, in the future, a common market. Over time, partners and observers have been added, but the heart of the bloc remains South American.

The agreement with the EU, politically concluded in December 2024, aims to progressively eliminate tariffs on 91% of trade, impacting one of the most important trade relationships globally.

European industry: fewer duties, more market

For European industry it means reducing tariffs that are currently very high: up to 35% on cars, 20% on industrial products, 18% on chemical products and 14% on pharmaceuticals. According to Commission estimates, EU companies would save around four billion euros a year in tariffs.

Mercosur is already a market of 280 million consumers in which around 30 thousand European companies operate. For Italy it is worth around 14 billion euros of trade and, according to an analysis commissioned by the Ministry of Foreign Affairs, it could become the most advantaged country by 2036.

Agriculture, the most sensitive issue of the agreement

The other side of the coin is agriculture. In exchange for opening up to European industrial products, the South American bloc gets greater access quotas for beef, poultry, sugar, rice and bioethanol. Brussels reiterated that imports must comply with EU standards: no hormone-treated meat or chlorinated chicken, protection of geographical indications for 347 European products, 58 of which are Italian.

There are limited quotas – 99 thousand tonnes of beef and 180 thousand of poultry – and a safeguard clause that allows intervention if imports exceed certain thresholds, lowered by Coreper from 8 to 5%.

The tractors in the square and a fracture that remains open

Guarantees that did not stop the protest. Today, January 9, tractors blocked traffic in Milan: bales of hay unloaded in front of the Lombardy Regional Council, horns and tricolor flags. The mobilization, promoted by Coapi and Riscattoagricoltura Lombardia, accuses the treaty of “fostering speculation and punishing European and South American farmers and citizens” and calls for fair prices and effective controls.

The tensions are not destined to die down quickly. The European Commission has promised greater resources for the future Common Agricultural Policy and has included compliance with the Paris Agreement on the climate among the essential elements of the agreement, providing for its suspension in case of violations. But the confrontation will now move to Strasbourg. The European Parliament’s vote is not a formality and, as today’s squares demonstrate, Mercosur remains an economic agreement that also talks about agricultural models, the environment and political choices that are difficult to keep together.