Business & Economics
Mercosur-EU Mega-Deal Signed Without Brazil’s Lula Present
On 17 Jan 2026, Mercosur and the EU finally inked their 25-year free-trade pact in Asunción, but Brazil’s President Lula da Silva stayed in Rio and sent his foreign minister instead.
Focusing Facts
- Treaty signed 17 Jan 2026 in Paraguay, creating a 700 million-person market and cutting tariffs on >90 % of bilateral trade.
- Brazil was the only Mercosur country not represented by its head of state; Foreign Minister Mauro Vieira stood in for Lula.
- 150+ Members of the European Parliament have signalled moves to delay or block ratification, forcing Brussels to consider provisional application of non-trade chapters.
Context
History rarely moves in straight lines. When the European Economic Community’s founding Treaty of Rome was signed in 1957, France’s Prime Minister Mollet almost pulled out over farm protections—echoing today’s European farmers who again fear cheaper imports. Like the Trans-Pacific Partnership (TPP) abandoned by the U.S. in 2017 and resurrected as CPTPP in 2018, the Mercosur-EU accord shows regional blocs filling the vacuum left by a stalled WTO and the resurgence of tariff nationalism—this time driven by a second Trump presidency. Lula’s no-show hints at the centrifugal forces that have plagued Mercosur since its 1991 birth: leaders use the bloc for leverage but resist ceding spotlight or sovereignty. Over a 100-year arc, the deal matters less for its immediate tariff cuts than for testing whether large, cross-continental agreements can survive domestic pushback from both climate activists and protectionist lobbies. If ratification unravels—as the 1998 MAI or 2005 FTAA did—the moment will be a footnote; if it holds, it could mark the pivot from WTO-centric rules to sprawling plurilateral compacts that shape supply chains and climate clauses into the late 21st century.
Perspectives
Pro-EU multilateralist commentary
e.g., Times of Malta, MercoPress, RTE — They present the pact as a historic triumph for multilateralism that will unlock prosperity, sustainable development and shared democratic values for 700 million people. Echoing leaders’ celebratory sound-bites, these pieces largely sidestep the fierce agricultural and environmental opposition described elsewhere, mirroring the European Commission’s sales pitch.
Protectionist-minded coverage stressing agricultural/job risks
e.g., Yahoo News, RFI — Reports foreground fears that cheaper South American imports and tariff cuts will devastate European farmers and cost Argentine industrial jobs, casting doubt on the deal’s benefits. By spotlighting worst-case losses and farmer protests, the stories amplify protectionist anxieties and may underplay the broader strategic or consumer gains touted by officials.
Political reporting on Lula’s no-show and intra-bloc friction
e.g., UPI, POLITICO — They frame President Lula’s absence from the signing ceremony as a diplomatic slight that reveals internal Mercosur strains and could complicate the agreement’s optics. Emphasising ceremonial optics over substantive support, this angle risks overstating rifts since the same articles concede Brazil remains a principal proponent of the deal.