Leaders from South America's Mercosur bloc have gathered in Buenos Aires for a pivotal two-day summit, with the central focus being a long-negotiated, comprehensive trade deal with the European Union. This landmark agreement, which has been 25 years in the making, currently faces significant blockage primarily from France. The proposed deal would facilitate increased exports of vehicles, machinery, and pharmaceuticals from the EU to South America, in exchange for greater access for Mercosur's meat, sugar, rice, and soybeans into European markets. While the agreement was struck in December by Brussels and Mercosur's founding members—Argentina, Brazil, Paraguay, and Uruguay—it still requires ratification by individual EU member states and the EU parliament.

The primary hurdle to the deal's ratification lies with France, where agricultural sectors express strong concerns about being undercut by what they perceive as less-regulated Latin American agricultural products. This opposition contrasts sharply with the strong backing the agreement receives from other key EU nations, including Germany, Spain, and Portugal. Experts note that the 'ball is in Europe's court,' suggesting that progress is contingent on EU willingness to move forward, which is currently hampered by the staunch French resistance. Interestingly, proponents on both sides of the Atlantic had previously hoped that the threat of punitive US tariffs, such as those imposed by former President Trump, might inject new urgency into ratifying a deal that would offer new export avenues.

For Mercosur members, ratifying this deal is considered to be of strategic interest, both individually and as a cohesive bloc. It is seen as a means to solidify international trade ties and provide economic benefits. Moreover, for Argentina's libertarian President Javier Milei, who has openly criticized Mercosur's constraints on member states striking independent trade agreements and has expressed a strong desire for a free trade deal with the United States, the successful ratification of the EU-Mercosur agreement could demonstrate the inherent value of maintaining group membership. Milei has even hinted at the possibility of withdrawing from Mercosur if it impedes his pursuit of a direct agreement with Washington.

Compounding the complexities of the summit is the current strained relationship between Brazil and Argentina, the two largest economies in South America. The animosity between President Milei, a vocal admirer of former US President Donald Trump, and Brazil's veteran leftist President Luiz Inacio Lula da Silva is palpable, with Milei having previously referred to Lula as 'corrupt' and a 'Communist,' and Lula dismissing Milei's remarks as 'nonsense.' This political friction was evident during a G20 summit in Rio de Janeiro last November, where their discomfort was widely observed. Adding a potential new layer of tension, former Argentine president Cristina Kirchner, who is serving a six-year fraud sentence under house arrest, has formally requested permission for President Lula to visit her for a solidarity visit during his time in Buenos Aires, a move that would undoubtedly anger her political adversary, President Milei.

Despite these significant political and interpersonal tensions, analysts anticipate that Mercosur, which now also includes Bolivia, will endure. Experts suggest that the bloc possesses a 'small but stable core of trade' and maintains other intertwined agendas that contribute to its resilience, allowing it to navigate through periods of strained relations and continue its functional existence in the regional and global economic landscape.