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After 25 years of tough, stop-and-go negotiations, EU countries on Friday moved closer to sealing a massive trade deal with South America, an agreement that could reshape markets for Cypriot farmers, food producers, and exporters.
A qualified majority of EU governments gave political backing to the EU-Mercosur deal, diplomats said, paving the way for a trade zone linking the EU with Brazil, Argentina, Paraguay and Uruguay and covering around 700 million people. France, Poland, Austria, Ireland and Hungary opposed the deal; Belgium abstained, while Italy voted in favor after previously delaying its position.
For Cyprus, the agreement cuts both ways.
On the upside, lower tariffs could help Cypriot exports such as wine, halloumi-style cheeses and other agri-food products compete more easily in new markets. Cyprus’ shipping and logistics sector could also benefit as trade flows between Europe and South America increase, boosting demand for ports, transport and services in the Eastern Mediterranean.
But there are also real concerns.
South American countries are major exporters of beef, poultry and agricultural goods produced at lower costs, a prospect that worries small-scale Cypriot farmers already struggling with high energy and feed prices. Local producer groups fear cheaper imports could squeeze prices and put pressure on rural livelihoods.
To calm those fears, EU ambassadors approved safeguard mechanisms that would allow the bloc to step in if imports surge beyond agreed limits. Brussels has also earmarked billions of euros in support for EU farmers as part of revisions made to the deal last year.
Beyond economics, the agreement carries geopolitical weight. EU officials see it as a strategic move at a time when China is expanding its influence in Latin America and the United States, under President Donald Trump, has leaned heavily on tariffs. For export-dependent economies like Cyprus, EU leaders argue the deal brings more stability and predictable access to global markets.
EU capitals now have until later Friday to raise formal objections under a written approval process. If that hurdle is cleared, European Commission President Ursula von der Leyen is expected to travel to Paraguay next week to sign the agreement.
The deal must still be approved by the European Parliament, and parts of it will go to national parliaments, meaning political battles are far from over.
Talks on the EU-Mercosur agreement began a quarter of a century ago and repeatedly stalled over farming, environmental standards, and market access. Friday’s vote signals the EU’s determination to finally move ahead, even as countries like Cyprus weigh whether the benefits for exporters and shipping will outweigh the risks for local farmers.
*With information from Politico
