>What is in the agreement?
The EU-Mercosur agreement is split into two parts, each with a different approval process. The first is a trade-only agreement – the Interim Trade Agreement (ITA). It falls under EU-only competence, meaning that it needs approval from the EU Council and the European Parliament to enter into force.
The second one is a broader association agreement – the EU–Mercosur Partnership Agreement (EMPA). It includes trade but also investment and political cooperation. It must be ratified by national parliaments, a process that could take years.
>The bones of contention
The most contentious elements are trade-related. For many EU industries, the deal is a clear win. It removes steep tariffs on EU exports – including duties of up to 35% on car parts and alcoholic drinks – and dismantles other trade barriers.
But, in return, the EU has granted concessions to Argentina and Brazil – two agricultural heavyweights – allowing duty-free quotas for beef and poultry, as well as other “sensitive” products such as rice, honey and sugar.
>Why is it controversial for farmers?
While Buenos Aires and Brasília consider the new quotas modest, many European farmers fear being undercut.
Their concern is that producers in Mercosur operate under lower labour, animal-welfare and environmental standards, while EU farmers must comply with extensive and costly regulations, including more restrictions on pesticides.

>What has the EU done to address this?

Farmers and EU agriculture ministers have repeatedly pushed for stronger safeguards and reciprocity in the deal over the past few years.
Many of the concerns have since been addressed. Safeguard clauses will allow the EU to suspend tariff-free imports for some products if markets come under pressure. These have been made even tighter in the latest round of talks between EU ambassadors on Monday, as Euractiv reported.
The European Commission is also stepping up border controls to prevent banned products from entering the bloc, and pushing new rules to imports of crops treated with hazardous pesticides outlawed in the EU.
> Why do the greens oppose?
Green and left-wing groups have long opposed the deal, warning it could drive deforestation by encouraging more intensive farming and resource extraction for export. Critics also fear it could undermine the rights of indigenous communities, many of whom have spoken out against the agreement.
The agreement comes as environmental groups and politicians criticise recent changes to the EU’s deforestation law. Adding to concerns, major Brazilian grain traders this week withdrew from a pact aimed at protecting the Amazon from soy-driven deforestation.

> Who’s supporting it?
EU industries – from automotive and machinery to chemicals and pharmaceuticals – all stand to gain from improved access to the Mercosur market. Germany, Europe’s car-making powerhouse, has long been one of the agreement’s strongest backers.
Food and drink producers – rather than farmers – also see major opportunities. Exporters expect growing demand for higher value-added products such as cheese, chocolate, wine and spirits.
The agreement also includes one of the largest lists ever negotiated of protected EU food and drink products – around 340 in total – shielding iconic names such as Spanish Manchego cheese or French Champagne from imitation.
Beyond the much-needed trade diversification due to tensions with the US and China, closer geopolitical ties with a major economic bloc like Mercosur are increasingly seen as strategic.
>What comes next?
European Commission President Ursula von der Leyen is expected to sign the deal in Paraguay, which currently holds Mercosur’s rotating presidency, in the second half of next week. The ceremony, initially planned for Monday, is now expected to take place any time after Wednesday due to logistical issues.
But the process is far from over.
While the European Parliament cannot amend the text, it must now either approve or reject it. Once again, the outcome is expected to be close, with MEPs voting more along national lines than ideological ones.
Before that, MEPs are set to vote on whether to refer the deal to the EU’s top court for a legal opinion. The move was first proposed in November by a group of 145 MEPs, but that was temporarily blocked, with EU Parliament political leaders citing the need to await the Council’s decision on the deal.
If the challenge passes, this could freeze the EU ratification process until the Court issues its opinion. The vote could take place at the next plenary session, which starts on 19 January.