Business & Economics
EU Council Greenlights EU-Mercosur Trade Pact After Italy Flips
On 9 January 2026 EU ambassadors approved the long-stalled EU-Mercosur free-trade agreement by qualified majority, overruling a French-led bloc of opponents.
Focusing Facts
- Italy’s late switch delivered 21 pro-deal votes representing >65 % of the EU population, while France, Poland, Austria, Hungary, and Ireland voted no and Belgium abstained.
- The pact abolishes tariffs on more than 90 % of goods for a joint market of roughly 780 million people, with the Commission projecting €4 billion in annual duty savings for EU exporters.
- Formal signing is slated for mid-January in Paraguay, but the treaty still needs European Parliament approval and some national ratifications before it can enter into force.
Context
Mega-regional deals have appeared before—NAFTA in 1994 and the EU’s own Single Market in 1993—but few have taken 25 years from launch (1999) to political sign-off. The vote underscores two structural currents: first, the EU’s push to diversify away from both U.S. protectionism and Chinese dependence, echoing the 1957 Treaty of Rome’s logic of pooling markets for strategic autonomy; second, the centuries-old tension between free-trading industrial centers and protected rural sectors that derailed the 1880s British push for Imperial Preference and again surfaces in today’s tractor blockades. In the short run the deal adds only a projected 0.05 % to EU GDP, so its significance lies less in economics than in signalling that Brussels can still clinch large accords despite internal veto points—a test of EU cohesion amid rising nationalism. On a 100-year timeline, whether this agreement endures may indicate if sprawling trans-regional blocs can outlast the current cycle of weaponised trade or if they fracture under domestic backlash, much as the 1930s tariff wars gutted earlier liberal orders.
Perspectives
EU pro-trade officials and business-focused outlets
e.g., Barchart.com, Novinite.com — Portray the EU-Mercosur accord as a historic boost to European exports and strategic autonomy, proving Brussels can still clinch big trade wins despite U.S. tariffs and Chinese pressure. They tend to downplay farmer unrest and inflate projected gains because their audiences and sources—EU institutions and export-oriented industries—benefit directly from new market access.
Agricultural protectionists and skeptical analysts
e.g., RTE.ie, Foreign Policy — Frame the pact as a threat that will undercut EU beef and poultry producers while delivering only negligible economic growth for Europe, fuelling political backlash and street protests. Reliant on farmer voices and anti-globalisation sentiment, this camp may overstate competitive harms and ignore safeguards in order to shield domestic constituencies from foreign competition.
South American regional press
e.g., Buenos Aires Times — Celebrate Brussels’ green light as a diplomatic triumph for Mercosur that will unlock a 700-million-person market and deepen ties with Europe. National pride and hopes for EU investment lead coverage to gloss over lingering ratification hurdles and EU environmental objections.