The European Commission is gearing up to sign its contentious trade agreement with South American bloc Mercosur on December 5 in Brazil, according to four EU diplomats who spoke to Politico, possibly sealing the fate of an accord that has languished in negotiations for more than a quarter-century.

The proposed timeline would see EU ambassadors deliberate on the agreement on December 3 before a formal signing ceremony during a planned EU-Mercosur summit in Brazil two days later, the diplomats told Politico on condition of anonymity.

The accelerated push comes as Brussels seeks to capitalise on a narrow political window before mounting agricultural protests and national elections threaten to derail what would become one of the world's largest free-trade zones, encompassing nearly 800mn people across both continents.

The economic stakes are substantial. Mercosur's four nations constitute the world's sixth-largest economy with 270mn inhabitants, whilst bilateral trade already exceeds €111bn annually — €55.2bn in EU exports and €56bn in imports in 2024, marking a 36% increase over the past decade, according to official EU data. Trade in services adds another €42bn, with the EU exporting €29.2bn whilst importing €13.4bn from the South American bloc.

Under the proposed arrangement approved last December, the Mercosur nations – Argentina, Brazil, Paraguay and Uruguay, plus recently added Bolivia – would curb duties on 91% of EU imports, whilst securing improved market access for agricultural exports ranging from beef to ethanol.

The signature would deliver a significant win for EU Commission President Ursula von der Leyen, who has touted the accord as essential for Europe's economic diversification amid escalating tensions with both Washington and Beijing. The EU already accounts for nearly 17% of Mercosur's total trade, with Brazil alone representing over 80% of the bloc's exchanges with Europe. The deal offers crucial access to lithium and other critical minerals vital for Europe's green transition, currently dominated by Chinese suppliers.

“Mercosur countries are among the largest global producers of lithium, iron ore, nickel and more. The new partnership will lower or remove export taxes. It will eliminate export restrictions and monopolies. And it will diversify our suppliers and reduce our overdependencies,” Von der Leyen wrote in an op-ed last year.

“On imports as much as on exports, the EU-Mercosur agreement will enhance Europe's competitiveness across the board.”

Yet the timing appears particularly bold given sustained resistance from agricultural nations that threatens to unravel Europe's most ambitious trade initiative in decades. France continues to lead opposition, with Poland maintaining staunch resistance despite acknowledging it now lacks sufficient allies to torpedo the initiative following Italy's recent shift towards endorsement.

Brussels has attempted to assuage agricultural concerns through unprecedented safeguard mechanisms unveiled in September, permitting suspension of preferential treatment should import volumes or market share surge by 10%, or if prices tumble by the same proportion.

The Commission has informed member states that the interim trade agreement would be signed separately at a later date, as it continues to undergo translation and legal review, according to the diplomats who briefed Politico. This interim arrangement would require only qualified majority support — 55% of member states representing 65% of the population — rather than the unanimous backing needed for the full partnership agreement.

This strategic division allows trade provisions to enter force whilst the broader political elements undergo what could be years of ratification through national parliaments. The interim trade agreement (iTA) would subsequently be replaced once the comprehensive EU-Mercosur Partnership Agreement (EMPA) secures full ratification.

The safeguard proposals have prompted subtle shifts in French positioning, with Trade Minister Laurent Saint-Martin last month describing the import caps as "a step in the right direction,” a departure from Paris's previously uncompromising stance.

Brussels would commit to closely monitoring imports of beef and poultry, with agricultural imports remaining negligible relative to European production — beef capped at 1.5% of EU output, poultry at 1.3%. Officials insist European food safety regulations would apply equally to all products entering the market.

The Commission projects the accord could expand European exports by nearly two-fifths, generating €49bn in additional trade whilst eliminating prohibitive duties including 35% levies on vehicles, up to 20% on industrial equipment, and 14% on pharmaceutical products. The EU already stands as Mercosur's largest foreign investor with €390bn in direct investment stock, yet both exporters and investors continue to face significant barriers that the agreement aims to dismantle.

Germany and Spain continue to champion the strategic logic, with Spanish Agriculture Minister Luis Planas recently declaring that "not a minute should be wasted" on what he termed a "historic opportunity.” Berlin views the agreement as vital breathing room as transatlantic trade friction intensifies under Donald Trump's renewed protectionism.

The fractious geopolitical context adds particular urgency to Brussels' calculations. With the Trump administration pursuing aggressive tariff policies and China expanding its foothold across Latin America, European officials view the Mercosur partnership as essential strategic positioning. Speaking to Euronews, Brazilian trade official Jorge Viana said in April that "with the hostile environment that the world is facing right now, we may collaborate to improve implementation of the agreement."

The December signing would coincide with the end of Brazil's rotating Mercosur presidency under President Luiz Inácio Lula da Silva, who has strongly backed the deal.

Meanwhile, the final ratification battle ahead promises to test Europe's commitment to open markets against domestic political pressures.

Officials have pledged supplementary measures, including potential harmonisation of pesticide regulations and animal welfare standards for imports. Whether these inducements, alongside broader EU agricultural support policies, prove sufficient to overcome entrenched opposition will determine the fate of negotiations that began when the euro was still in its infancy.