EU envoys provisionally approve signing of record Mercosur trade deal

EU ambassadors gave provisional approval on Friday to the signing of the bloc's largest ever free trade accord with South American group Mercosur, over 25 years since negotiations began and after months of wrangling to secure key member states' backing, according to three EU diplomats and sources.

The European Commission, which concluded negotiations a year ago, and countries such as Germany and Spain argue it is a vital part of an EU push to unlock new markets to offset business lost from US tariffs and to secure access to critical minerals.

Opponents led by France, the European Union's largest agricultural producer, say the agreement will jack up imports of cheap food products, including beef, poultry and sugar, undercutting domestic farmers. Farmers have launched protests across the EU, blocking French and Belgian highways and marching in Poland on Friday.

Ambassadors from the EU's 27 member states indicated their governments' positions on Friday with at least 15 countries representing 65 percent of the bloc's total population voting in favor, as required for approval, the EU sources and diplomats said. 

EU capitals have been given until 5 p.m. Brussels time (1600 GMT) to provide written confirmation of their votes.

This will clear the way for Commission President Ursula von der Leyen to sign the agreement with Mercosur partners – Argentina, Brazil, Paraguay and Uruguay – possibly as early as next week. The European Parliament will also need to approve the accord before it can enter force.

The free trade agreement would be the European Union's biggest in terms of tariff reduction, removing $4.66 billion of duties on its exports. The Mercosur countries have high tariffs, such as 35 percent on car parts, 28 percent on dairy products and 27 percent on wines.

The EU and Mercosur will hope to expand an evenly-split goods trade worth $129 billion in 2024. EU exports are dominated by machinery, chemicals and transport equipment, while Mercosur's are focused on agricultural products, minerals, pulp and paper.

To win over skeptics of the deal, the European Commission has put in place safeguards that can suspend imports of sensitive farm produce. It has strengthened import controls, notably regarding pesticide residues, established a crisis fund, accelerated support for farmers, and has pledged to cut import duties on fertilizers.

The concessions were not enough to win over Poland or France, but Italy shifted from a 'no' in December to a 'yes' on Friday, according to one EU diplomat.

French Agriculture Minister Annie Genevard has said the battle is not over and has pledged to fight for a rejection by the EU assembly, where the vote could be tight. European environmental groups also oppose the accord, with Friends of the Earth calling it a "climate-wrecking" deal.

German Social Democrat Bernd Lange, the chair of parliament's trade committee, expressed confidence that the deal would be passed, with a final vote most likely in April or May.