EU-Mercosur pact springs to life, thorn in the side of Trump’s Donroe doctrine

EU member states backed on Friday the long-delayed trade agreement with South America’s Mercosur bloc, creating a common market of nearly 780 million consumers, despite strong opposition from France.

The move clears the way for European Commission President Ursula von der Leyen to sign the largest-ever free-trade agreement in Paraguay on 12 January.

France, Poland, Austria, Hungary and Ireland voted against the deal, while Belgium abstained. The adoption required only a qualified majority of EU countries.

France said it will continue its fight against the deal in the European Parliament, a stance that marks a setback for Paris’s efforts to build a blocking minority within the Council.

The development brings to an end more than two decades of arduous negotiations between the European Commission and a group of Latin American countries – as well as years of internal EU divisions. Talks were repeatedly suspended and resumed amid concerns over environmental protection and compliance with EU agricultural and food standards.

The approval followed the adoption of safeguard measures allowing for tighter monitoring of the EU market in order to prevent serious disruptions caused by imports from Mercosur countries.

Mercosur vs. Donroe doctrine

There is arguably no better moment for EU countries to approve the Mercosur agreement, which stands in sharp contrast to Washington’s new trade policy and the trade wars reignited last year by U.S. President Donald Trump.

The EU-Mercosur trade agreement paves the way for tariff-free trade between the EU and the South American bloc comprising Argentina, Brazil, Paraguay, and Uruguay – nations that have faced or are threatened by substantial tariffs under Trump’s policies, potentially granting the EU a competitive edge in accessing these markets.

Trump’s tariff-heavy approach has reshaped global commerce and prompted Mercosur nations to seek alternatives like deals with the UAE, Canada, and India – ultimately highlighting a divergence in transatlantic trade strategies that may intensify economic competition between the EU and the U.S. in Latin America.

At the end of of 2025, the White House published the so-called “Donroe Doctrine”, a revised version of the isolationist Monroe Doctrine followed by the United States in the second half of the 19th century. The document states that any intervention by European countries in the Americas would be regarded as an act of aggression against the U.S.

The “Donroe Doctrine”, drafted by the Trump administration, explicitly declares that “U.S. dominance in the Western Hemisphere will never be questioned again”.

Controversies persist

The EU Commission strongly supports the Mercosur deal, which will grant European industrial goods – including cars and machinery, unrestricted, tariff-free access to South American markets.

The agreement has nevertheless proved highly controversial, particularly among European farmers who fear an influx of agricultural imports from Mercosur countries into the EU. Farmers protested in central Paris on the eve of the meeting, while demonstrations have also taken place in Poland.

EU leaders had hoped to sign the pact at their summit last month, but last-minute opposition from Italy, which tipped the balance against the deal, derailed those plans. Rome ultimately backed the agreement in exchange for additional EU subsidies for farmers in the bloc’s next long-term budget.

EU-Mercosur trade deal faces fresh hurdles as leaders gather in Brussels

The deal includes safeguard mechanisms for farmers, such as the possibility of launching an investigation into the suspension of preferential treatment if there is a surge in import volumes from South America or a drop in prices compared with the three-year average.

The threshold for triggering such an investigation has been set at 5%, following lobbying by countries such as Italy and France, as well as the European Parliament.

France has has consistently opposed the trade agreement on the grounds that it would harm European farmers and consumers. Countries such as Germany and Spain have been strong supporters of the agreement, arguing that it will open up new export opportunities. Germany in particular sees Mercosur as a market for its automobile industry.

Macron seeks ‘new’ Mercosur deal as EU signing delayed amid farmer fury

“France is favourable to international trade, but the EU–Mercosur agreement is a deal from another era, negotiated for far too long on far too outdated foundations,” French President Emmanuel Macron said in a post on X on Thursday evening.

“It does not justify exposing sensitive and strategic agricultural sectors to risks for our food sovereignty,” he added.

According to estimates by Bloomberg Economics, the deal could boost the Mercosur bloc’s economy by up to 0.7% and the EU’s by 0.1%. Geopolitically, it is expected to strengthen the EU’s influence in a region where China has established itself as a key industrial supplier and commodity buyer.

The Southern Common Market (Mercosur) is a South American trade bloc established by the 1991 Treaty of Asunción and the 1994 Protocol of Ouro Preto. Its full members are Argentina, Bolivia, Brazil, Paraguay and Uruguay. Venezuela is a full member but has been suspended since December 2016. Chile, Colombia, Ecuador, Guyana, Panama, Peru and Suriname are associate members.

Sources: Euronews, Bloomberg

Caption: French farmers block the streets with tractors near the Eiffel Tower during a demonstration as part of a nationwide day of protests and actions called by several farmers’ unions to push the French government to block the Mercosur trade deal, in Paris, France, 8 January 2026. EPA/YOAN VALAT