EU aims to finalize Mercosur trade deal by early December

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Efforts to secure a trade deal between the EU and Mercosur are gathering pace ahead of a summit next month.

The EU has been ramping up its trade talks with the South American Mercosur bloc of nations with the goal of finalizing a deal by early next month.

It has been reported that the timetable has been dictated by political circumstances, with Brazil's presidency of Mercosur set to come to an end next month and Argentina's newly-elected libertarian president Javier Milei scheduled to take office on December 10th.

Reuters notes that while Mr Milei has been generally pro-trade, he has heavily criticized Mercosur and pledged in his campaign to withdraw Argentina from the group if elected.

A European diplomat said his victory would make Brazilian president Luiz Inacio Lula da Silva "even more keen" to get a trade deal with the EU done as quickly as possible. It has been suggested Brazilian negotiators are aiming to announce a deal at a Mercosur summit on December 7th, which has been brought forward to before Mr Milei's inauguration.

Meanwhile, another European official told the Financial Times that Brussels has “ramped up the frequency and intensity of negotiations in the belief that a landing zone for political agreement is only achievable under the Brazilian Mercosur presidency."

Talks on a deal between the EU and the Mercosur bloc of Brazil, Argentina, Uruguay and Paraguay have dragged on for two decades, with major areas of disagreement including EU demands for greater environment commitments, which the South American countries have rejected as protectionist.

With Mr Milei a vocal skeptic of climate change, there are concerns that his policies could be a stumbling block for ratification among lawmakers in Brussels.

Other areas that are yet to be agreed include a timetable for the free trade of electric vehicles, export duties and competition in public procurement. Mercosur negotiators also want a binding mechanism to take remedies if the EU blocks certain exports.

Despite the issues and ideological differences between the Brazilian and Argentine governments, several commentators have suggested they expect progress to be made rapidly. Welber Barral, a former Brazilian trade secretary, told Reuters that pragmatism is likely to prevail on both sides as trade relations are too important.

"The opening of markets is part of Milei's discourse, so he will probably support the EU agreement, in spite of his criticism of Mercosur," he added.