European Commission President Ursula von der Leyen is in Uruguay hoping to finalize the Mercosur trade deal. /Frederick Florin/AFP
European Commission President Ursula von der Leyen has arrived in Uruguay seeking to finalize a long-delayed trade deal between the EU and South America's Mercosur bloc.
France has slammed the agreement as "unacceptable" but the country's political paralysis has arguably weakened its influence.
Von der Leyen arrived hours after President Emmanuel Macron's government collapsed following a no-confidence vote in parliament over efforts to rein in France's budget deficit, leaving Macron scrambling to name a new prime minister.
Foreign Ministers from Brazil, Argentina, Uruguay, Bolivian and Paraguay at the Mercosur summit, in Montevideo. /Martin Varela Umpierrez/Reuters
The Mercosur deal is 20 years in the making and deeply divisive in Europe where farmers and Paris have been the loudest voice in opposition.
It would create one of the world's largest trade partnerships and turbocharge the flow of beef and grains.
In a post on X, von der Leyen wrote: "The finish line of the EU-Mercosur agreement is in sight. Let's work, let's cross it. The largest trade and investment partnership the world has ever seen. Both regions will benefit."
Mercosur includes farming powerhouses Brazil, Argentina, Uruguay and Paraguay and is meeting for a planned summit in Montevideo. Negotiators expect a trade deal to be unveiled, despite several false dawns, including a 2019-signed agreement that failed to be ratified by nations in Europe.
Four South American and European sources involved in the talks said the deal was done and will be announced on Friday by Mercosur leaders and von der Leyen now that both sides have ironed out final details on environmental issues and government purchases.
"Everything went as we expected. We worked out an agreement that was enough for both sides," said a South American source involved in the negotiations who asked not to be named as the deal was not yet public.
A government official from Spain, which has backed the deal, agreed: "The expectation is that it will be signed tomorrow."
Farmers burn a wooden pallet to warm themselves during a recent protest against the EU-Mercosur Trade Agreement, in Strasbourg, France. /Yves Herman/Reuters
Yet von der Leyen, just days into her second term, faces stern opposition at home to the deal, which would be the largest struck by the EU in terms of tariff reductions.
EU countries as a whole and the European Parliament will have to approve any trade deal agreed.
European farmers have repeatedly protested against the deal, saying it will lead to cheap imports of South American commodities, notably beef, which is not subject to the same green and food safety standards as in the EU.
France has been the most vociferous critic of the proposed agreement.
Though distracted by a political crisis after the collapse of Prime Minister Michel Barnier's short-lived government, Macron's office issued a statement on Thursday saying the planned EU-Mercosur deal was "unacceptable".
But other EU members such as Germany insist the EU-Mercosur deal is vital for the bloc as it looks to diversify its trade after the near-closure of the Russian market and amid discomfort about Europe's reliance on China.
"If we achieve a deal between the EU and Mercosur, it will be great news for the Union," Spain's Agriculture Minister Luis Planas said at an event in Brussels, adding it would be good for exports and show that Europe was "not shut in behind our doors".
"In the present context we cannot be defensive."
Supporters of a deal also see Mercosur as a potentially reliable source of critical minerals such as battery metal lithium, required for Europe's green transition.
South American negotiators remain optimistic that the EU will eventually give its approval and that France will not be able to rally a blocking minority.