EU-MERCOSUR TRADE DEAL

EU offers farmers extra funds to quell anger at Mercosur deal

European Union will adjust its budget proposal for 2028-2034 to allow farmers early access to around 45 billion euros (US$53 billion) in funding.

Farmers stand next to potatoes and a tractor parked in front of the European Parliament, during a farmers' protest to denounce the reforms of the Common Agricultural Policy (CAP) and trade agreements such as the Mercosur, in Brussels, on December 18, 2025, organised by Copa-Cogeca, the main association representing farmers and agricultural cooperatives in the EU. The European Commission on January 6, 2026 offered a carrot to farmers angered at a trade deal with the South American bloc Mercosur and plans to overhaul EU farming subsidies, promising additional funds for the sector. Foto: NICOLAS TUCAT / AFP
06 January 2026

The European Union on Tuesday offered a carrot to farmers angered at a trade deal with South American bloc Mercosur, promising to unlock funds for the sector as it seeks to get the accord over the line.

The commission said it plans to tweak its budget proposal for 2028-2034, which has come under fire from agricultural groups, to allow farmers early access to around 45 billion euros (US$53 billion).

The move comes amid a push to ease the qualms of some countries over the Mercosur deal, which Brussels hopes to ink next week.

More than 25 years in the making, the accord would create the world's biggest free-trade area, boosting trade between the 27-nation EU and the bloc comprising Brazil, Paraguay, Argentina and Uruguay.

But it has alarmed many European farmers who fear they will be undercut by a flow of cheaper goods from agricultural giant Brazil and its neighbours.

Thousands protested in Brussels last month, venting their anger also at EU plans to overhaul its system of farm subsidies, which critics say would result in farmers receiving less money. 

In a Tuesday letter, EU chief Ursula von der Leyen unveiled budget changes she said would "provide the farmers and rural communities with an unprecedented level of support." 

The letter was released as EU agriculture ministers are due to gather in Brussels on Wednesday for an extraordinary meeting to get the Mercosur deal over the line.

Plans to seal the accord in December ran into a late roadblock as heavyweights Italy and France demanded a postponement over concerns for the farming sector.

Germany and Spain are strongly in favour of the agreement, believing it will provide a welcome boost to their industries, hampered by Chinese competition and tariffs in the United States.

The deal would help the EU export more vehicles, machinery, wines and spirits to Latin America at a time of global trade tensions.

In return, it would facilitate the entry into Europe of South American meat, sugar, rice, honey and soybeans.

 

– TIMES/AFP

In this news

related news