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EU-Mercosur Trade Deal Signed Amid Rising Political Tensions in France
European leaders signed the EU-Mercosur trade deal on Saturday with Argentina, Brazil, Paraguay, and Uruguay, aiming to strengthen the bloc’s strategic and economic position. European Commission President Ursula von der Leyen called the agreement “25 years in the making” and described it as an “achievement of a generation” that prioritizes long-term partnerships over tariffs.
The deal, which would create a transatlantic free-trade zone, is seen by supporters as vital for countering China’s growing influence in Latin America. EU imports from Mercosur countries have fallen behind China’s share, reversing a trend seen in 2000 when the EU’s presence was six times larger. Advocates also argue the deal will diversify EU trade amid tighter US market access and growing reliance on Chinese materials and technology.
However, the agreement has exposed deep political divisions within the EU, with France emerging as the most vocal opponent. Paris voted against the deal in a key Council vote on 9 January, despite a majority of member states backing it. Critics in France argue the deal threatens domestic agriculture, exposing farmers to competition from Latin American imports that may not meet EU production standards.
The debate has intensified ahead of the European Parliament’s ratification process, scheduled to begin Monday. Lawmakers remain divided along national lines. France, Poland, Hungary, Ireland, and Austria opposed the deal, while Belgium abstained. In France, the issue has become a political flashpoint, feeding eurosceptic sentiment and prompting far-right Rassemblement National leader Jordan Bardella to launch a no-confidence motion in both the European Parliament and the National Assembly.
Supporters of the deal counter that France’s agricultural struggles are largely home-grown and point to concessions built into the agreement, including environmental safeguards, tariff-rate quotas for sensitive products such as beef and poultry, and a €45 billion support package for EU farmers from 2028. Despite these measures, Paris remains unconvinced, with President Emmanuel Macron noting that the deal would raise EU GDP by just 0.05% by 2040 and that tariff reductions on EU cars would be phased in over 18 years.
Other EU sectors stand to benefit from the agreement, particularly services, dairy, wine, spirits, and access to public procurement markets. Spanish MEP Javier Moreno Sánchez emphasized the deal’s importance in a “geopolitical and geo-economic context,” citing the need to negotiate on equal terms amid global trade tensions. German MEP Svenja Hahn highlighted that fears of agricultural disruption may be overstated, noting low utilization of quotas in similar deals like CETA.
After 25 years of negotiations, the Mercosur deal represents one of the EU’s most ambitious trade agreements. While supporters hope to build momentum for ratification in the European Parliament, opposition in France and a broader eurosceptic wave in parts of the bloc could complicate its implementation. Analysts warn that the deal’s political fallout may last longer than its economic impact, particularly in France, where public resistance to free-trade agreements runs deep.
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Pakistan Signals Near-Completion of US-Iran Peace Deal as Negotiations Intensify
Pakistan’s Prime Minister Shehbaz Sharif said on Saturday that a proposed peace agreement between the United States and Iran was closer than ever to being finalised, with expectations that it could be completed within 24 hours. His remarks came amid heightened diplomatic activity involving multiple regional and international actors working to bridge long-standing differences between Washington and Tehran.
Iranian state media reported on Sunday that Tehran had not yet reached a final decision on the draft agreement aimed at ending tensions between the two countries. The uncertainty followed a series of statements suggesting that progress had accelerated significantly in recent days.
US President Donald Trump also indicated on Saturday that a deal was within reach, echoing optimism from mediators involved in the process, including Pakistan. In a post on his Truth Social account, Trump stated that the agreement was scheduled for signing the following day. He added that once completed, the Strait of Hormuz would be opened for unrestricted passage.
“Hopefully, this process will all work out quickly, easily, and smoothly. If it doesn’t, we have the ultimate alternative, hopefully never to be used again,” Trump said, while also emphasizing that the arrangement would prevent nuclear escalation.
Prime Minister Shehbaz Sharif, speaking earlier on Saturday, described the situation as being at its closest point to resolution. He said Pakistan was preparing for an electronic signing ceremony once final agreement was reached. According to his statement on X, technical-level discussions would continue in the days following the signing to ensure implementation of the deal’s provisions.
Diplomatic engagement continued on Sunday when a Qatari delegation arrived in Tehran. According to Iran’s Tasnim news agency, the delegation’s purpose was to review the latest developments related to the ongoing diplomatic process and maintain momentum in negotiations.
Central to the proposed agreement is Iran’s commitment to fully reopen the Strait of Hormuz, a critical maritime passage for global oil and gas shipments. Another key condition involves curbing Tehran’s nuclear program, which has been a longstanding point of contention in its relations with Western powers.
While optimism has grown among mediators, Iranian authorities have not confirmed final approval, leaving the outcome uncertain. Negotiations are expected to continue as involved parties attempt to resolve outstanding issues and move toward formal agreement.
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