EU states back record South America trade deal after 25 years

By Philip Blenkinsop

BRUSSELS, Jan 9 (Reuters) - EU states gave a provisional go-ahead on Friday for the bloc to sign its largest ever free trade accord with South American group Mercosur, more than 25 years since talks began and after months of wrangling to secure enough backers.

With ​Donald Trump determined to shake up global trade, the European Commission and countries such as Germany and Spain argue the deal will help offset ‌business lost from U.S. tariffs, and reduce reliance on China by securing access to critical minerals.

Opponents led by France, the European Union's largest agricultural producer, say the agreement will jack up imports of cheap ‌food products, including beef, poultry and sugar, undercutting domestic farmers.

FARMERS MARCH, BLOCK HIGHWAYS

Farmers have launched protests across the EU, blocking French and Belgian highways and marching in Poland on Friday.

France voted against the deal - but at least 15 countries representing 65% of the bloc's total population voted in favour, enough for approval, EU sources and diplomats said.

An EU diplomat and Poland's agriculture minister said that 21 countries supported the agreement, with Austria, France, Hungary, Ireland and Poland against and Belgium abstaining.

German Chancellor Friedrich Merz hailed Friday's vote as ⁠a "milestone" and said the deal would be good for ‌Germany and for Europe.

"But 25 years of negotiations is too long. It's vital that the next free trade agreements are concluded swiftly," he said in a statement.

EU capitals have been given until 5 p.m. Brussels time (1600 GMT) to provide written confirmation of their votes.

This ‍would clear the way for Commission President Ursula von der Leyen to sign the agreement with Mercosur partners - Argentina, Brazil, Paraguay and Uruguay - in Asuncion, possibly next week.

The European Commission concluded negotiations on the deal a year ago. The European Parliament will also need to approve the accord before it can enter force.

FRANCE SAYS THE BATTLE IS NOT OVER

The free trade agreement ​would be the European Union's biggest in terms of tariff reduction, removing 4 billion euros ($4.66 billion) of duties on its exports. The Mercosur countries have high ‌tariffs, such as 35% on car parts, 28% on dairy products and 27% on wines.

The EU and Mercosur will hope to expand evenly split goods trade worth 111 billion euros in 2024. EU exports are dominated by machinery, chemicals and transport equipment, and Mercosur's are focused on agricultural products, minerals, pulp and paper.