France Casts Doubt on E.U.-Mercosur Trade Deal as Farmers Push Back
France has described the E.U.-Mercosur Partnership Agreement as “incomplete,” casting doubt on its future, despite the potential benefits of creating the world’s largest free trade area. While European olive oil producers largely support the deal, concerns remain about the impact on domestic farmers and the need for further safeguards to protect European agriculture.
The future of a landmark free trade agreement between the 27-member European Union and four Mercosur countries has been thrown into doubt after France described the deal as “incomplete.”
The E.U.-Mercosur Partnership Agreement, which took 25 years to negotiate, would create the world’s largest free trade area, linking the European Union’s 450 million consumers with 270 million people in Argentina, Brazil, Paraguay and Uruguay.
Once approved by the E.U.’s 27 capitals, the agreement would gradually eliminate tariffs on nearly all manufactured and agricultural goods, including olive oil and table olives, over a 15-year period.
However, French Prime Minister Sébastien Lecornu said France could not approve the agreement until “concrete, precise elements” are implemented to address concerns raised by farmers.
“This is why France is asking for the next steps in December to be pushed back, to continue the work and to obtain legitimate protections for our European agriculture,” Lecornu’s office said.
As negotiations neared completion, opposition from European farmers intensified, with producer groups warning that lower production costs in Argentina and Brazil could undercut domestic agriculture.
In response, the European Parliament is expected to vote this week on a proposal to introduce a binding safeguard mechanism that would allow tariffs to be reimposed if European farmers are harmed. Lawmakers are also considering a separate amendment to ban food imports that do not comply with E.U. production standards.
The European Commission has cautioned that adopting these measures would require the agreement to be sent back to South American capitals for renewed approval. “If we don’t sign Mercosur in the next days, it will be dead,” a European diplomat told the Financial Times.
Despite the uncertainty, olive oil producers and exporters in Europe have largely welcomed the deal. Support has been particularly strong in Spain, where olive oil ranked among the country’s top agricultural exports to the four Mercosur nations in 2024.
Carlos Cuerpo, Spain’s minister of economy, trade and enterprise, estimated that olive oil exports to Mercosur countries could rise by 40 to 50 percent once the agreement is fully implemented.
World Bank data show that the European Union exported 52,300 metric tons of virgin and extra virgin olive oil to the four Mercosur countries in 2024, with a total value of $578 million.
According to separate World Bank figures, Argentina currently applies a 31.5 percent tariff on all extra virgin olive oil imports, while Paraguay and Uruguay impose a nine percent duty.
Early indications of how the agreement could affect European exporters may emerge in Brazil, which removed tariffs on olive oil and other food imports at the start of 2025 in an effort to curb consumer prices. The first shipments from the 2025/26 harvest will be among the earliest to enter the country tariff-free.
While exporters in Portugal, Spain and Italy have welcomed the agreement, many South American olive oil producers view it with apprehension.
They share the concerns voiced by European farmers, warning that Europe’s lower production costs could give imported oils a decisive advantage over local producers.
“If an agreement were to be reached between the European Community and Mercosur, it would be a challenge and something that would not be very favorable for our category,” Miguel Zuccardi, head of olive oil production at Argentina-based Familia Zuccardi, told Olive Oil Times in late 2024.
Producers in Uruguay have also raised alarms, noting that large Spanish and Italian bottlers already compete aggressively on price in supermarkets and online retail channels.
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