Dubai Telegraph - What to know about the EU-Mercosur deal

European Commission President Ursula von der Leyen is set to visit Brazil on Saturday to sign the so-called Mercosur deal.

Over 20 years in the making, the contentious pact would create the world's largest free-trade zone, but has critics up in arms over its far-reaching implications for European farmers.

France and Italy oppose the deal currently on the table, as do the thousands of agricultural workers heading to protest in the Belgian capital on Thursday.

- What is the Mercosur deal? -

The free-trade agreement is between the EU and South America's Mercosur bloc, made up of Brazil, Argentina, Uruguay and Paraguay.

The lifting of customs duties would therefore affect two enormous markets: 450 million consumers in Europe, and 270 million in South America.

Concluded in late 2024 but awaiting ratification, the deal would allow the EU to export more vehicles, machinery, wines and spirits to Latin America, while facilitating the entry of South American beef, sugar, rice, honey and soybeans into Europe.

Europe's energy and technological transition has prompted the bloc to strengthen ties with a mineral-rich region boasting lithium, copper, iron and cobalt.

- Why are farmers against it? -

Farmers fiercely contest the Mercosur deal, which they say will flood the market with cheaper alternatives and cause untold damage to their livelihoods.

Agricultural unions have projected up to 10,000 protestors in Brussels on Thursday, including 4,000 from France.

Latin America's agricultural sector meanwhile stands to benefit substantially.

In 2024, the four Mercosur countries exported $23.3 billion worth of agricultural and agrifood products to the EU, according to Eurostat, resulting in a trade deficit of €20.1 billion ($23.6 billion) for the EU.

Criticism has also focused on the deal's impact on livestock farming.

It provides for export quotas to the EU of a maximum of 99,000 tonnes for beef, which is 1.6 percent of the bloc's production.

The commission has said that duties of over 40 percent, and not 7.5 percent, will continue to apply to any exports above the quota.

French cattle farmers fear a threat to their competitiveness, claiming their South American counterparts are not subject to the same environmental and food security measures as in Europe.

On Tuesday, the European Parliament attempted to provide reassurance by agreeing to monitor imports of sensitive products like beef, poultry and sugar, with the possible reintroduction of customs duties in the event of averse effects.

EU lawmakers want the commission to intervene if a Mercosur product costs at least five percent less than its EU equivalent, and if the volume of duty-free imports increases by more than five percent.

The original proposal fixed both thresholds at 10 percent, and the bloc must now settle on a compromise.

- Is there a timeline? -

Von der Leyen is set to travel to Foz do Iguacu to sign the deal during a Mercosur leaders summit.

But she first requires the approval of European heads of state before jetting off, which she is under pressure to secure at Thursday's summit.

The parliament must also approve the decision, and a narrow vote is likely, with 150 lawmakers calling for a legal challenge to the deal at the European Court of Justice.

- Who is for and against it? -

Spain supports the Mercosur deal, anticipating a boost to its wine and olive oil exports. Agriculture Minister Luis Planas on Tuesday reiterated his call to sign the "crucial" pact "in the coming days".

Germany has adopted a similar tone, with the EU's largest economy likely bolstered by a determination to salvage its flailing automobile industry.

French President Emmanuel Macron said Wednesday that "France would firmly oppose" any "desire from European authorities to force through" the deal.

He demanded robust safeguard clauses, tighter import controls and more stringent standards for Mercosur producers.

And on Wednesday, Italy's far-right premier Giorgia Meloni warned against "premature" ratification as safeguards for farmers still had to be finalised.

Brazil's President Luiz Inacio Lula da Silva on Wednesday repeated calls for EU member states to consent to the deal.

"I've already warned them: if we don't do it now, Brazil won't make any more agreements while I'm president," he said.

C.Masood--DT