“All the cards are on the table. They want to make sure that an agreement is close so that Ursula doesn’t fly for nothing,” said one person familiar with the EU-Mercosur talks, referring to European Commission President Ursula von der Leyen. This person was granted anonymity due to the sensitivity of the matter.
A round of in-person talks is planned for the week of Nov. 25 in Brazil to close the remaining loopholes, a Commission official said. They declined to give a timeline for the conclusion of the deal but stressed that the Mercosur countries — Brazil, Argentina, Uruguay, Paraguay and newcomer Bolivia — are increasing the pressure to seal it soon.
Uruguay will host a Mercosur summit from Dec. 2-4, when Javier Milei’s Argentina will take over the bloc’s rotating presidency.
The “cows for cars” deal would lift trade barriers and create a common market of nearly 800 million people that accounts for a fifth of global GDP. For its European supporters, led by Germany, the pact is long overdue as China extends its economic footprint across the South American continent and pushes European businesses aside.
“If we don’t do a trade agreement with [Mercosur], then this void will be filled really by China,” incoming EU foreign affairs chief Kaja Kallas said on Tuesday. Between 2020 and 2022, Chinese investment in Latin America increased 34 times, the former Estonian prime minister told a confirmation hearing in Brussels.
Loose ends
The negotiations are not yet concluded, people familiar with the talks said, with issues on public procurement, the environmental sections of the deal and its legal structure not formally closed. Specifically, Mercosur countries are asking the EU for more flexibility and time to give local companies a chance to compete with their EU rivals. Brazil is also eager to shield its local car industry from EU imports, especially of electric vehicles.
