European Union approves Mercosur free-trade deal with four South American countries

The European Union on Friday approved a sweeping free-trade agreement with Argentina, Brazil, Paraguay and Uruguay, overcoming deep dissension among its members to clear a pact that would create one of the world’s largest trade zones connecting markets of more than 700 million people.

Negotiations in Brussels produced last-minute revisions and concessions, including early access to 45 billion euros in agricultural aid, to win crucial backing. The deal, long opposed by European farmers and environmentalists who argued South American producers did not meet European standards on pesticides, deforestation, animal treatment and worker rights, drew tractor protests in Paris. European carmakers and pharmaceutical manufacturers in Germany, Spain and elsewhere supported the pact, and Bolivia will eventually become eligible to participate.

The accord is set to cut tariffs on European exports to South America and on South American goods shipped to Europe, and proponents say it would provide access to critical raw materials aside from China. Ms. von der Leyen could travel to Paraguay next week to formally sign the agreement, but the European Parliament must still approve it. Whether the pact will reshape regional alignments amid recent U.S. confrontational policies and China’s loans, investments and Belt and Road ties remains unclear.

Key Topics

Business, European Union, Mercosur, Argentina, Brazil, Paraguay