As global trade dynamics shift, the Mercosur-EU trade deal faces potential hurdles, with Brazilian officials anticipating a challenging diplomatic journey. France, Poland, and Italy may attempt to block the agreement, while a coordinated campaign against it is expected in the summer, alongside potential resistance in the European Parliament. The aim remains to secure approval by year-end.
Brazilian President Lula is anticipated to play a role in advancing the process. While no fixed timetable exists, Brazilian authorities emphasize Lula's involvement as pivotal. Jorge Viana of ApexBrasil noted, "Trump is helping as Europe doesn't have many alternatives but to strengthen existing or pending agreements."
Viana, alongside officials and business leaders, recently engaged in a diplomatic tour through Portugal, Poland, and Belgium, with Brussels marking the final stop. The agreement, negotiated since 1999, was announced in 2024 by Mercosur heads of state and European Commission President Ursula von der Leyen. It aims to establish a free trade area for 700 million people with a $22 trillion GDP.
Amid rising protectionism, the deal gains urgency. The World Trade Organization, citing U.S. trade policy, revised its 2025 global trade flow forecast from a 2.7% increase to a 0.2% contraction. Both EU and Mercosur officials have intensified messaging on the agreement's strategic and economic importance.
Several steps remain before implementation. The text is being translated into the EU's 23 official languages, with specific versions for Mercosur. Approval by 65% of the European Council is required, representing at least 55% of the EU population. Brazilian negotiators monitor daily shifts in vote counts. An alignment among France, Poland, and Italy could block the deal.
The final hurdle is a simple majority vote in the European Parliament, where lobbying pressure is more pronounced. Aloysio Nunes of ApexBrasil highlighted the need for public opinion efforts.
Brazilian officials view Lula's involvement as crucial. Viana emphasized the "revival of presidential diplomacy" since Lula's return in 2023. A potential boost came with the expected recognition of Brazil as free of foot-and-mouth disease without vaccination.
Brazil's ambassador to the EU, Pedro Miguel da Costa e Silva, foresees "quiet" approval, but warns of a "relentless campaign" by opponents, necessitating a "grueling" response.
In Brazil, approval is expected to proceed with fewer obstacles. Once passed by Brazil's National Congress, the changes will take immediate effect.
Senator Nelsinho Trad remarked, "This global conflict ends up creating opportunities and negotiation windows that become vital for countries trying to protect themselves."
The agreement will undergo review by various committees before reaching the floor of both the Chamber of Deputies and the Senate.
Source: Valor International