EU-Mercosur Trade Deal Nears Conclusion as Von der Leyen Heads to Summit
European Commission President Ursula von der Leyen is traveling to Uruguay for the Mercosur summit, signaling optimism for the finalization of a landmark trade agreement between the European Union and the South American bloc, Bloomberg reports.
The deal, years in the making, would create one of the world’s largest free trade areas, encompassing 780 million consumers.
Sources familiar with the negotiations, speaking anonymously due to the sensitivity of the matter, confirmed that von der Leyen’s attendance at the summit, opening Thursday, suggests a deal is imminent.
The agreement would significantly reduce tariffs on a wide range of goods. European Union exporters, particularly in the automotive sector (currently facing a 35% tariff), stand to benefit greatly. Tariffs on car parts, machinery, chemicals, clothing, and textiles would also be phased out. In return, the EU would open its market to increased imports of agricultural products from Mercosur countries.
The deal holds strategic importance for the EU, strengthening its presence in a region where China has been increasingly influential.
However, the path to ratification remains challenging. Key EU member states, including France and Poland, have voiced concerns about environmental and regulatory aspects of the agreement, delaying its implementation since the initial 2019 agreement in principle. The current political climate in France, where President Emmanuel Macron is dealing with a governmental crisis, adds another layer of complexity.
Despite these hurdles, strong support from Germany and Spain, alongside Brazil’s persistent push for a deal, fuels the optimism.
Von der Leyen is scheduled to meet with Uruguayan President Luis Lacalle Pou on Thursday.
