The landmark trade agreement between the European Union and South America’s MERCOSUR bloc faces potential collapse following Brussels’ decision to postpone ratification. The development emerged during the MERCOSUR Summit in Foz do Iguaçu, Brazil, where member nations Argentina, Brazil, Paraguay, and Uruguay had anticipated finalizing the treaty that has been under negotiation for nearly three decades.
The postponement, resulting from insufficient consensus among European nations, has triggered significant discontent among South American governments. The EU has deferred its decision until January, citing the need for additional assessment time, particularly for Italy to evaluate the agreement’s domestic implications.
In response to the delay, MERCOSUR leadership issued stark warnings about the future of negotiations. Brazil, which is transferring the bloc’s pro tempore presidency to Paraguay, joined with its successor in indicating that further delays could terminate the protracted talks permanently.
Brazilian Foreign Minister Mauro Vieira articulated the bloc’s contingency strategy, stating that failure to secure the EU agreement would prompt MERCOSUR to pivot toward alternative strategic markets. Potential trading partners identified include Canada, the United Kingdom, Japan, and various Asian nations. Additionally, the bloc plans to pursue updated agreements with existing partners such as India.
The postponement represents another setback for one of the world’s most ambitious trade pacts, which would create a market encompassing nearly 800 million consumers and reshape transatlantic economic relations.