The European Union is postponing the signing of a free trade agreement with four Mercosur countries – Brazil, Argentina, Uruguay, and Paraguay – until January, an EU official said Thursday. A new date for signing the agreement is now to be set for the first half of January, EU representatives said on the sidelines of a summit of heads of state and government in Brussels.

European Commission President Ursula von der Leyen had hoped to sign the treaty at the Mercosur summit on Saturday in the Brazilian city of Foz do Iguaçu, Brazil. But it needed the approval of an enhanced majority of member states in Brussels.

Although the European Commission was backed by Germany, the EU’s largest economy, as well as Spain, Denmark, Sweden and Finland, strong opposition from France and backtracking by Italy and other member states resulted in the deal being postponed.

On Wednesday, the European Parliament and Council negotiators informally agreed to “safeguard” measures aimed at reassuring farmers across the coalition, which will be implemented once the deal comes into force.

But despite Brussels’ efforts, the anger of European farmers has not been assuaged. On Thursday, a few meters from the Europa Building where EU leaders were meeting, about a thousand vehicles and 10,000 farmers from across the European Union demonstrated against the free trade agreement.

Outside the European Parliament, protesters lit fires, threw fireworks, and hurled potatoes, bottles, and other objects at police, who responded with tear gas and water cannons.

Similar demonstrations also took place during the plenary session of the European Parliament in Strasbourg, France, at Liège airport in Belgium, and in some other member states, including Spain, Poland, and Bulgaria.

The EU-Mercosur free trade agreement

But what does the agreement include, and why is it causing such a strong reaction? Mercosur, also known as the Southern Common Market, is a South American trade coalition founded in 1991. Negotiations for a free trade agreement with the EU began in 1999, but an agreement in principle was only reached by the two sides in 2019. However, the agreement was never ratified due to environmental, social, and economic concerns.

In December 2024, progress was made on the agreement, with the EU and the Mercosur coalition – including Brazil, Argentina, Uruguay, and Paraguay – finally reaching the adoption of the largest trade agreement the EU has ever concluded. It now needs to be ratified by an enhanced majority of EU governments, meaning at least 15 of the 27 member states representing at least 65% of the EU population.

The European Parliament has still not given its final approval to the agreement.

After 25 years in the making, the EU-Mercosur free trade agreement was to create the largest free trade area in the world. According to the European Commission’s Directorate General for Trade (DG TRADE), the EU is Mercosur’s second-largest trading partner in goods, with exports of €57 billion in 2024. The EU accounts for a quarter of Mercosur’s total trade in services, with EU exports to the region reaching $29 billion in 2023.

Once signed, the agreement will allow the EU to export more vehicles, machinery, wines and spirits to Latin America, while facilitating the entry into Europe of South American beef, sugar, rice, honey and soybeans. In recent days, Brussels has repeatedly stressed that signing before the end of the year is necessary for the “credibility” of the European Union and to avoid upsetting Latin American partners. Adding to the tension, Brazilian President Luiz Inácio Lula da Silva had previously warned that “if it is not closed now, we will not sign while I am president.”

However, on Thursday, the Brazilian president opened the door to delaying the signing of the deal to change the minds of those who oppose it. Lula had a phone call with Italian Prime Minister Georgia Meloni, who asked him to be “patient” and said Rome is finally ready to sign.

“I spoke with Meloni, and she explained that she is not opposed to the deal, but Italy is in a difficult political moment because of the Italian farmers. She is convinced she can convince them to accept it,” Lula said. “(Meloni) asked me to be patient for a week, ten days, or at most a month, and Italy will sign,” the Brazilian president added.

To appease those most opposed – the agricultural sector across the coalition, France, and other countries such as Italy or Poland – the European Parliament and the Council agreed Wednesday on bilateral “protection” measures. These include the possibility to suspend preferential tariffs on sensitive agricultural products – such as poultry, beef, eggs, citrus and sugar – the introduction of stricter limits beyond which the protections take effect, and close and continuous market monitoring by the Commission to assess the impact of the tariffs and act accordingly.

The European Parliament’s rapporteur on this issue, MEP Gabriel Mato, told reporters afterwards: “Today we are sending a clear message: we can go ahead with the Mercosur agreement without leaving our farmers unprotected. We have agreed on a strong, swift, and legally sound protection mechanism that allows us to respond promptly to market disruptions and provide the sector with the certainty it has long sought.”