EU-Mercosur trade deal angers farmers, environmentalists

Climate activists and farmers often disagree, but the EU's free trade deal with Mercosur has got them both on edge.

The European Commission took the first step on Wednesday to ratify a long-awaited free-trade package with Latin American countries: an agreement with Mexico, and, crucially, one with members of the Mercosur trading bloc. 

The EU spent over 25 years negotiating the deal with Argentina, Brazil, Uruguay and Paraguay, the four founding members of the Southern Common Market, or Mercosur. Bolivia, which joined the group only last year, and Venezuela, whose membership has been suspended, are not included in the deal.

But the free trade agreement is facing pushback from a wide array of advocacy groups and European politicians.

What is the EU-Mercosur deal about?

The agreement aims to facilitate the flow of goods between the EU's member states and the four Mercosur economies. The EU says this would create one of the world's biggest trade zones with over 780 million people and could help soften the blow of US tariffs by opening new export opportunities. 

"It's probably one of the most significant and economically impactful trade argeements that have been concluded," Ignacio Garcia Bercero, senior fellow at the Brussels-based think tank Bruegel and former EU official told DW.

According to the agreement, over the course of several years, the two sides will lift over 90% of the respective tariffs they currently apply to each other's products. 

This will include between 20% and 35% tariffs on European spirits, as well as the 35% on European cars that Mercosur has in place. The EU is also promising companies "exclusive preferential access to critical raw materials and green goods."

European countries will, for example, allow — limited — beef imports from Mercosur at a lowered duty of 7.5%.

Why are Europe's farmers worried?

But agricultural groups have been very critical of the EU-Mercosur deal, with major lobby group Copa-Cogeca calling it "economically and politically damaging for Europe's farmers, rural communities, and consumers" in a statement.

The primary concern for European farmers is that imports could create unfair competition and drive down food quality. Beef, poultry and sugar are among the most contentious products.

To alleviate such worries, the European Commission has proposed several measures that would help mitigate potential market disruptions caused by the free trade agreement.

They include a gradual opening of the EU market, import limits on certain products and a €6.3 billion ($7.3 billion) support fund for EU farmers. The proposal for the EU's next Common Agricultural Policy, traditionally one of the EU's biggest budget items subsidizing agriculture, also promises over €300 billion of income support for agriculturers. 

"We know that there are concerns, especially from our farmers, and I want to assure everyone that we have heard them," EU Commissioner for Trade and Economic Security, Maros Sefcovic, said on Wednesday. 

Member state opposition softening

The protective measures have eased some skepticism about the deal among member states. 

Agricultural powerhouse France has long been one of the deal's most vocal opponents. But on Wednesday, French Trade Minister Laurent Saint-Martin said on social media that the EU's measures were "a step in the right direction."

Italy's government, which has also been critical, welcomed "additional safeguards to protect European farmers" in a statement on Thursday.

The gradual shift in positions leaves Poland as the last major holdout, as its government still openly opposes the deal.

The EU's largest poultry producer generated €3.3 billion from exports to EU countries alone in 2024, according to the national statistics office. With the Mercosur deal potentially introducing competition to this top position, Poland fears a decrease in prices and a threat to the livelihood of its farmers. 

"We won't give up when it comes to the interests of Polish agricultural producers," Prime Minister Donald Tusk told Polish media on Wednesday. But the Polish leader acknowledged that his government will not be able to block the deal which countries like export-reliant Germany have been pushing for. 

Is the EU bypassing democratic oversight?

After decades of negotiation, the European Commission is now seeking a swift conclusion. "We would like to complete the approval process for Mercosur by the end of this year," Sefcovic said.

To speed things up, the Commission has presented the trade deal as a "split agreement" — separate from a more comprehensive agreement with Mercosur covering areas like political or judicial cooperation. 

Because this deal covers areas of exclusive EU competence, decisions on the deal can be met at the EU-level rather than involving individual national parliaments. First, it will have to be approved the Council of the European Union. There, instead of unanimous approval, the deal only needs requires a qualified majority representing at least 65% of the EU population.

Then, it will be sent to the European Parliament, where it is expected to spark fierce debate. 

Some critics view the splitting of the deal as an attempt to sideline member states. "They are excluding democratic scrutiny and public debate at the national level. This also fuels distrust in institutions," Audrey Changoe, a trade and investment policy expert at Climate Action Network (CAN) Europe told DW.

MEPs planning legal steps

A trade-only deal also provides insufficient protection for the environment, Saskia Bricmont, an MEP with the Greens, told DW. She echoed warnings by environmental groups that it would drive deforestation, particularly in the Amazon, and hurt indigenous communities as well as farmers.

"This seems to be incompatible with our EU treaties and commitments," Bricmont said. 

Together with several other deputies of the European Parliament she said she is now planning to ask the European Court of Justice for a legal opinion on the matter, ultimately hoping to suspend the ratification process of the EU-Mercosur deal.

Strengthening Europe in the world

But despite these concerns, trade expert Garcia Bercero told DW that the ratification of the trade deal would send a strong political message to the world. 

"In a world in which you are facing such huge threat towards rules, it's important to show that like-minded democracies are ready to cooperate," he said. Volatile US tariff policies and challenges in trading with China made the deal with Mercosur even more crucial, he added.

Should the deal fail, he fears it could damage the EU's reputation: "The message to the rest of the world would be that the EU is not a reliable trading partner."

Edited by: M. Sass