BRUSSELS — European Commission President Ursula von der Leyen is planning to travel to Australia this month to clinch a security and trade deal, according to a person familiar with the talks. Her trip will follow a meeting next week between European Trade Commissioner Maroš Šefčovič and his Australian counterpart Don Farrell in Brussels, a second person said. Both people were granted anonymity because the schedules are still tentative. The EU and Canberra are moving to revive trade negotiations that collapsed at the end of 2023 amid disagreements over quotas of beef and lamb. The quotas are still being negotiated between Canberra and Brussels, the first person familiar with the talks said. Von der Leyen will take the 20-hour-plus flight to Australia directly after she attends the Munich Security Conference, which takes place in the German city on Feb. 13-15, according to Australian digital newspaper The Nightly, which broke the news of the Commission chief’s four-day trip. EU countries last December allowed the Commission to negotiate a defense deal with Australia. Sealing such a deal would come on the heels of security and defense partnerships signed with the U.K., Canada and most recently India. An agreement with Australia would represent a win for the EU, as it would open access to the country’s vast reserves of strategic minerals. Australia is the world’s largest producer of lithium and also holds the world’s second-largest copper reserves. Coming after the EU’s fraught Mercosur deal with South American countries — criticized by farmers, France and skeptical lawmakers — the pact with Canberra is expected to also trigger pushback due to its significant agricultural component.

BRUSSELS ― European governments and corporations are racing to reduce their exposure to U.S. technology, military hardware and energy resources as transatlantic relations sour.  For decades, the EU relied on NATO guarantees to ensure security in the bloc, and on American technology to power its business. Donald Trump’s threats to take over Greenland, and aggressive comments about Europe by members of his administration, have given fresh impetus to European leaders’ call for “independence.” “If we want to be taken seriously again, we will have to learn the language of power politics,” German Chancellor Friedrich Merz said last week. From orders banning civil servants from using U.S.-based videoconferencing tools to trade deals with countries like India to a push to diversify Europe’s energy suppliers, efforts to minimize European dependence on the U.S. are gathering pace. EU leaders warn that transatlantic relations are unlikely to return to the pre-Trump status quo. EU officials stress that such measures amount to “de-risking” Europe’s relationship with the U.S., rather than “decoupling” — a term that implies a clean break in economic and strategic ties. Until recently, both expressions were mainly applied to European efforts to reduce dependence on China. Now, they are coming up in relation to the U.S., Europe’s main trade partner and security benefactor. The decoupling drive is in its infancy. The U.S. remains by far the largest trading partner for Europe, and it will take years for the bloc to wean itself off American tech and military support, according to Jean-Luc Demarty, who was in charge of the European Commission’s trade department under the body’s former president, Jean-Claude Juncker. Donald Trump’s threats to take over Greenland, and aggressive comments about Europe by members of his administration, have given fresh impetus to European leaders’ call for “independence.” | Kristian Tuxen Ladegaard Berg/NurPhoto via Getty Images “In terms of trade, they [the U.S.] represent a significant share of our exports,” said Demarty. “So it’s a lot, but it’s not a matter of life and death.” The push to diversify away from the U.S. has seen Brussels strike trade deals with the Mercosur bloc of Latin American countries, India and Indonesia in recent months. The Commission also revamped its deal with Mexico, and revived stalled negotiations with Australia. DEFENDING EUROPE: FROM NATO TO THE EU Since the continent emerged from the ashes of World War II, Europe has relied for its security on NATO — which the U.S. contributes the bulk of funding to. At a weekend retreat in Zagreb, Croatia, conservative European leaders including Merz said it was time for the bloc to beef up its homegrown mutual-defense clause, which binds EU countries to an agreement to defend any EU country that comes under attack. While it has existed since 2009, the EU’s Article 42.7 mutual defense clause was rarely seen as necessary because NATO’s Article 5 served a similar purpose. But Europe’s governments have started to doubt whether the U.S. really would come to Europe’s rescue. In Zagreb, the leaders embraced the EU’s new role as a security actor, tasking two leaders, as yet unnamed, with rapidly cooking up plans to turn the EU clause from words to an ironclad security guarantee. “For decades, some countries said ‘We have NATO, why should we have parallel structures?’” said a senior EU diplomat who was granted anonymity to talk about confidential summit preparations. After Trump’s Greenland saber-rattling, “we are faced with the necessity, we have to set up military command structures within the EU.” At a weekend retreat in Zagreb, Croatia, conservative European leaders including Merz said it was time for the bloc to beef up its homegrown mutual-defense clause, which binds EU countries to an agreement to defend any EU country that comes under attack. | Marko Perkov/AFP via Getty Images In comments to EU lawmakers last week, NATO Secretary-General Mark Rutte said that anyone who believes Europe can defend itself without the U.S. should “keep on dreaming.” Europe remains heavily reliant on U.S. military capabilities, most notably in its support for Ukraine’s fight against Russia. But some Europeans are now openly talking about the price of reducing exposure to the U.S. — and saying it’s manageable. TECHNOLOGY: TEAMS OUT, VISIO IN The mood shift is clearest when it comes to technology, where European reliance on platforms such as X, Meta and Google has long troubled EU voters, as evidenced by broad support for the bloc’s tech legislation. French President Emmanuel Macron’s government is planning to ban officials from using U.S.-based videoconferencing tools. Other countries like Germany are contemplating similar moves. “It’s very clear that Europe is having our independence moment,” EU tech czar Henna Virkkunen told a POLITICO conference last week. “During the last year, everybody has really realized how important it is that we are not dependent on one country or one company when it comes to some very critical technologies.” France is moving to ban public officials from using American platforms including Google Meet, Zoom and Teams, a government spokesperson told POLITICO. Officials will soon make the switch to Visio, a videoconferencing tool that runs on infrastructure provided by French firm Outscale. In the European Parliament, lawmakers are urging its president, Roberta Metsola, to ditch U.S. software and hardware, as well as a U.S.-based travel booking tool. In Germany, politicians want a potential German or European substitute for software made by U.S. data analysis firm Palantir. “Such dependencies on key technologies are naturally a major problem,” Sebastian Fiedler, an SPD lawmaker and expert on policing, told POLITICO. Even in the Netherlands, among Europe’s more pro-American countries, there are growing calls from lawmakers and voters to ring-fence sensitive technologies from U.S. influence. Dutch lawmakers are reviewing a petition signed by 140,000 people calling on the state to block the acquisition of a state identity verification tool by a U.S. company. At the World Economic Forum in Davos, Switzerland, in late January, German entrepreneur Anna Zeiter announced the launch of a Europe-based social media platform called W that could rival Elon Musk’s X, which has faced fines for breaching the EU’s content moderation rules. W plans to host its data on “European servers owned by European companies” and limits its investors to Europeans, Zeiter told Euronews. So far, Brussels has yet to codify any such moves into law. But upcoming legislation on cloud and AI services are expected to send signals about the need to Europeanize the bloc’s tech offerings. ENERGY: TIME TO DIVERSIFY On energy, the same trend is apparent. The United States provides more than a quarter of the EU’s gas, a share set to rise further as a full ban on Russian imports takes effect. But EU officials warn about the risk of increasing Europe’s dependency on the U.S. in yet another area. Trump’s claims on Greenland were a “clear wake-up call” for the EU, showing that energy can no longer be seen in isolation from geopolitical trends, EU Energy Commissioner Dan Jørgensen said last Wednesday. The Greenland crisis reinforced concerns that the bloc risks “replacing one dependency with another,” said Jørgensen, adding that as a result, Brussels is stepping up efforts to diversify, deepening talks with alternative suppliers including Canada, Qatar and North African countries such as Algeria. FINANCE: MOVING TO EUROPEAN PAYMENTS Payment systems are also drawing scrutiny, with lawmakers warning about over-reliance on U.S. payment systems such as Mastercard and Visa. The digital euro, a digital version of cash that the European Central Bank is preparing to issue in 2029, aims to cut these dependencies and provide a pan-European sovereign means of payment. “With the digital euro, Europeans would remain in control of their money, their choices and their future,” ECB President Christine Lagarde said last year. In Germany, some politicians are sounding the alarm about 1,236 tons of gold reserves that Germany keeps in the Federal Reserve Bank of New York. “In a time of growing global uncertainty and under President Trump’s unpredictable U.S. policy, it’s no longer acceptable” to have that much in gold reserves in the U.S., Marie-Agnes Strack-Zimmermann, the German politician from the liberal Free Democratic Party, who chairs the Parliament’s defense committee, told Der Spiegel. Several European countries are pushing the EU to privilege European manufacturers when it comes to spending EU public money via “Buy European” clauses. Until a few years ago, countries like Poland, the Netherlands or the Baltic states would never have agreed on such “Buy European” clauses. But even those countries are now backing calls to prioritize purchases from EU-based companies. MILITARY INVESTMENT: BOOSTING OWN CAPACITY A €150 billion EU program to help countries boost their defense investments, finalized in May of last year, states that no more than 35 percent of the components in a given purchase, by cost, should originate from outside the EU and partner states like Norway and Ukraine. The U.S. is not considered a partner country under the scheme. For now, European countries rely heavily on the U.S. for military enablers including surveillance and reconnaissance, intelligence, strategic lift, missile defense and space-based assets. But the powerful conservative umbrella group, the European People Party, says these are precisely the areas where Europe needs to ramp up its own capacities. When EU leaders from the EPP agreed on their 2026 roadmap in Zagreb, they stated that the “Buy European” principle should apply to an upcoming Commission proposal on joint procurement. The title of the EPP’s 2026 roadmap? “Time for independence.” Camille Gijs, Jacopo Barigazzi, Mathieu Pollet, Giovanna Faggionato, Eliza Gkritsi, Elena Giordano, Ben Munster and Sam Clark contributed reporting from Brussels. James Angelos contributed reporting from Berlin.

STRASBOURG — In a vote that could delay the European Union’s trade deal with Mercosur by up to two years, the European Parliament on Wednesday sent the Latin American accord for a judicial review. By a majority of just 10 votes, MEPs backed a resolution to seek an opinion from the Court of Justice of the EU on whether the texts of the EU-Mercosur agreement comply with the EU treaties. The motion was carried — to applause and cheers from its backers — with 334 votes in favor, 324 against, and 11 abstentions. The Parliament won’t be able to vote on the deal itself until the court has issued its opinion — a process that typically takes between 18 to 24 months.  The delay now raises the question of whether the EU executive will provisionally apply the agreement while waiting for the court to rule — putting the two institutions on a collision course over democratic accountability. The outcome represents a major defeat for the European Commission and countries backing the deal, which want to deepen ties with the Mercosur countries — Argentina, Brazil, Paraguay and Uruguay — and see the accord as the perfect opportunity to stand strong against U.S. President Donald Trump’s erratic tariffs.  “The more trading partners we have world-wide, the more independent we are. And that is exactly what we need now,” the European Commission President Ursula von der Leyen said in a last-minute appeal to lawmakers earlier on Wednesday.  Bernd Lange, the chair of the Parliament’s international trade committee, condemned the outcome of the vote. “Absolutely irresponsible. This is an own goal,” Lange posted on X. “Those against #EU #Mercosur should vote against in consent procedure instead of using delaying tactics under the guise of legal review. Very harmful for our economic interests and standing. Team Europe putting itself offside.” This story has been updated.

LONDON — U.S. President Donald Trump’s trade negotiators are pushing for the U.K. to adopt American standards in a move that would derail Britain’s post-Brexit relationship with the European Union, two people familiar with the talks have told POLITICO. The U.S. is also pushing hard for the recognition of American accreditation bodies in the U.K., three other people with knowledge of the demands confirmed. The joint moves would have knock-on effects for safety-critical sectors like food, forensics, manufacturing and NHS testing, experts fear. “It’s this invisible infrastructure that no one really knows about but which keeps everyone safe — and that’s now under threat,” a person briefed on the talks told POLITICO. They, like others cited in this piece, were granted anonymity to speak freely. American negotiators have turned up the heat in trade talks with the recent suspension of the Technology Prosperity Deal, amid frustration over the pace of wider negotiations. U.K. negotiating asks on steel and Scotch whisky tariffs have also gone unanswered. Trump threatened a fresh wedge in the relationship over the weekend, vowing to impose tariffs on Britain and other European allies pushing back at his desire for the United States to own Greenland. The standards push comes as the Trump administration hollows out American watchdogs, with sweeping cuts to the Food and Drug Administration and the dismantling of the Consumer Product Safety Commission. While food standards remain a red line for the U.K. government, some figures familiar with the talks fear the U.K. could cave in on other U.S. demands. “My concern is that these red lines that have been red lines from the outset and for years are under increasing threat of being breached,” the person cited above said.   British negotiators have so far refused to back down, but U.S. negotiators “keep circling back” on these issues, another person who was briefed on the talks by both governments said. Peter Holmes, an expert on standards from the UK Trade Policy Observatory at the University of Sussex, warned that accepting U.S. demands could lead to a “race to the bottom” with the U.K. regarded as a “wild west market” internationally. A U.K. government spokesperson said: “Our historic agreement with the U.S. has already delivered for the pharma, aerospace and auto sectors, while our deal with the EU will see the removal of trade barriers including SPS, saving hundreds of millions on U.K. exports.” “We have and always will be clear that we will uphold our high food, animal welfare and environmental standards in trade deals, and negotiations will continue with both the EU and U.S. on strengthening our trading relationship,” the spokesperson added. The U.K. says it will uphold its high food, animal welfare and environmental standards in trade deals. | Geography Photos/Universal Images Group via Getty Images A spokesperson for the United States Trade Representative said the claims came from “anonymous and irrelevant sources” with “no insight into the trade discussions between the U.S. and U.K.”  The spokesperson did not contest any specific aspects of this report. They added that the two nations had successfully implemented “numerous aspects of the U.S.-U.K. EPD,” including “mutually expanding access of U.S. and U.K. beef in each other’s markets.”  “The U.S. and U.K. continue to work together constructively on finalizing remaining aspects of the EPD, including the U.K. commitment to ‘improve market access for agricultural products’ from the United States,” the spokesperson said. IMPACT ON BREXIT RESET TALKS Giving in to the U.S. demands would upset Britain’s ability to trade more closely with the EU as part of ongoing Brexit “reset” negotiations with the bloc that include alignment on food standards and carbon emissions in manufacturing. The U.K. government has “very clear red lines around all of this because they are going to do certain things with the EU,” the second person quoted above explained. “You would have thought these matters had already been well ventilated and resolved,” the person added, explaining that in talks the U.S. side “keep saying ‘why can’t you do more food standards? Why aren’t you coming closer on our side of it? Are you really sure what you’re doing with the EU is the right thing to do?’” Negotiations with the U.S. are “pretty much [in] stasis at the moment,” the same person continued. As London’s Brexit reset talks with the EU progress this year, “the possibility to have the kinds of changes that the U.S. is putting forward become much diminished when those agreements with the EU start to get over the line.” RECOGNITION OF ACCREDITATION BODIES Multiple people briefed on the trade talks claim the U.S. proposals go beyond the terms of the original U.K.-U.S. Economic Prosperity Deal agreed last May between U.S. President Donald Trump and Britain’s Prime Minister Keir Starmer.  In addition to headline commitments to cut tariffs on cars, steel and pharmaceuticals, the wide-ranging deal included a promise to address “non-tariff barriers,” including a pledge to treat conformity assessment bodies — such as testing labs and certification groups from the other nation — in a way that is “no less favorable” than the treatment of its own.  This is an increasingly common commitment in U.K. trade deals and typically means that accreditation bodies would have the power to accredit a whole range of certification and testing providers from the other country. However, U.S. negotiators are now pushing for the recognition of disparate American accreditation bodies, which would give them the authority to approve certification, testing and verification organizations in the U.K., three people briefed on the talks confirmed. Accepting this demand would mean that the U.K.’s national accreditation body, UKAS, would no longer meet the basic requirements of membership in the European Co-operation for Accreditation, under which national accreditation bodies recognize each other’s accreditations.  U.K. Prime Minister Keir Starmer says he wanted the U.K. to seek “even closer alignment” with the EU. | Leon Neal/Getty Images This would put the proposed U.K.-EU agrifood deal and plans to link U.K. and EU Emissions Trading Schemes “at massive risk,” should those deals require the EU to recognize U.K. emissions verification bodies and food control laboratories, the first person cited above explained. An industry figure familiar with the ETS linkage talks said an acceptance of the changes would amount to a “watering down” of the entire carbon pricing system, adding that “every single company falling under UK ETS” would be “absolutely furious.” It could also jeopardize any future alignment with the EU in other areas such as manufactured goods, a second industry figure briefed on the negotiations said.  The U.K. government has indicated a willingness to go even further in its relationship with the EU, with U.K. Prime Minister Keir Starmer saying he wanted the U.K. to seek “even closer alignment” with the single market.  Beyond plans outlined in the Common Understanding last May, “there are other areas where we should consider if it’s in our interests to … align with the single market,” he told the BBC in a recent interview. “Now that needs to be considered on an issue-by-issue, sector-by-sector basis, but we’ve already done it with food and agriculture, and that will be implemented this year.” ‘RACE TO THE BOTTOM’ The U.S. operates a decentralized standards system in which accreditation is carried out by a competitive network of organizations, most of which are commercial. This is in direct contrast to the U.K.’s current model of accreditation, whereby a single, non-profit accreditation body, UKAS, oversees certification and product testing in the public interest. The UK Trade Policy Observatory’s Peter Holmes warned that adopting the U.S. system could lead to a “race to the bottom”, with UKAS pitted against American accreditation bodies. “They might have to cut corners and give up their legally-required public service obligations,” he said.  Accepting U.S. accreditation bodies would make the U.K. a “wild west market where you can’t trust anything that’s on sale in the U.K.,” he added. The U.K. government has repeatedly rejected the possibility of changes to British standards, including the possibility of accepting American chlorine-washed chicken and hormone-treated beef.  “We will not compromise on food standards,” Trade Minister Chris Bryant said in an interview with CNBC this month. “That is the beginning and end of everything I have to say on that subject. Food standards are really important. There is no compromise for us to strike there.”

The European Union and the Mercosur bloc on Saturday signed their long-awaited trade agreement, sealing one of the world’s biggest free-trade deals after more than 25 years of negotiations and repeated political standoffs. European Commission President Ursula von der Leyen and European Council President António Costa attended the ceremony in Asunción, Paraguay, alongside Mercosur leaders from Argentina, Uruguay and host country Paraguay. Brazilian President Luiz Inácio Lula da Silva, a key proponent of the pact, did not attend, delegating representation to his foreign minister. “This agreement sends a strong signal to the world,” von der Leyen said at the signing ceremony. “It reflects a clear and deliberate choice. We choose fair trade over tariffs, we choose a productive, long-term partnership.” The signing marks the culmination of a bruising political battle inside the EU that only cleared its final hurdle last week, when member states backed the agreement by a qualified majority following a flurry of last-minute concessions. France, Poland, Austria, Ireland and Hungary opposed the agreement, while Belgium abstained. Attention now turns to ratification. The deal must still be approved by the European Parliament and national legislatures on both sides of the Atlantic, where opposition — particularly from farming groups — is expected to remain fierce. If fully ratified, the agreement would create a free-trade area covering more than 700 million people across Europe and Latin America. More than 90 percent of tariffs on EU exports would be phased out over time, opening new markets for European manufacturers, especially in industrial sectors. Mercosur countries, meanwhile, would gain greater access to the EU market for agricultural products under strict quota systems designed to protect sensitive European sectors such as beef and poultry. Von der Leyen has framed the deal as a strategic victory, arguing it reinforces rules-based trade at a moment of growing geopolitical fragmentation. EU officials see it as a way to reassert influence in Latin America amid intensifying competition from China and rising uncertainty around U.S. trade policy. But the agreement came at a steep political price.  To win over skeptical governments, the Commission pledged €45 billion in additional support for EU farmers, blunting resistance from countries concerned about cheap imports undercutting domestic producers. French President Emmanuel Macron emerged as one of the pact’s most prominent losers. Despite sustained efforts to block or delay the deal — citing pressure from France’s farming sector — Paris failed to assemble a blocking minority. Italy ultimately backed the agreement after extracting safeguards and funding commitments for its own farmers.

Denmark and Greenland “still have a fundamental disagreement” with the U.S. over President Donald Trump’s desire to control the Arctic territory, Denmark’s foreign minister said Wednesday. Lars Løkke Rasmussen and his Greenland counterpart Vivian Motzfeldt finally had their chance to try to turn down the temperature at the White House after more than a year of aggressive internet trolling, statements and demands from the U.S. Their conversation did little to dissuade Trump and his team from their hold on Greenland. “We didn’t manage to change the American position,” Rasmussen said. “It’s clear that the president has this wish of conquering over Greenland. We made it very very clear that this is not in the interest of the Kingdom.” Rasmussen and Motzfeldt took pains to describe the session as respectful, but their frustration that their longtime ally would not cooperate was clear. “It is of course very emotional for all of us,” Rasmussen said. The U.S., Denmark and Greenland agreed in the meeting to convene high-level working groups to see if they could find a way forward, but Rasmussen said he was unsure whether it would be possible. Demands that would violate Denmark and Greenland’s sovereignty are “totally unacceptable,” he said. Denmark has contributed $15 billion to Arctic security over the past two years and has pressed the U.S. and other NATO countries to do more through the alliance, Rasmussen added. Denmark announced earlier Wednesday that it would beef up its security presence in Greenland, which has been under Danish control for nearly 300 years. The officials noted much of what Trump and his team continue to say about Greenland is untrue, including Trump’s often repeated claim that Greenland is crawling with Russian and Chinese warships. Rasmussen said there has not been a Chinese warship in the Arctic for a decade. Those statements and Trump’s threatening tone do not yield a constructive dialogue, Rasmussen said. “It is not easy to think innovatively about solutions when you wake up every morning to different threats,” he said. On Wednesday morning, Trump posted on Truth Social that the United States needed to acquire Greenland for his Golden Dome missile defense project, his latest rationale. “NATO should be leading the way for us to get it,” Trump wrote. “IF WE DON’T, RUSSIA OR CHINA WILL, AND THAT IS NOT GOING TO HAPPEN.”

Officially, the EU’s Mercosur trade deal is a defeat for Europe’s farmers. In reality, farm lobbies just can’t stop winning. EU countries endorsed the bloc’s long-delayed agreement with South American nations on Friday, clearing the way for European Commission President Ursula von der Leyen to fly to Paraguay later this week and close a deal that has haunted Brussels for more than two decades. The agreement is going through despite tractor protests, border blockades and fierce opposition from farm groups and capitals including Paris and Warsaw. But the price of getting Mercosur over the line was steep. In the run-up to the endorsement, Brussels quietly stacked the deck in farmers’ favor. Import safeguards were hardened. Controls tightened. And last week, the Commission unveiled a €45 billion budget maneuver allowing governments to shift more money to farmers under the EU’s next long-term budget. Taken together, the concessions mean Mercosur will enter into force wrapped in protections and paired with a farm budget settlement that leaves the sector stronger than before. “Other sectors complain,” said one Commission official involved in agricultural policy. “Farmers block roads.” The official, like others in this story, was granted anonymity to speak freely. The blunt assessment captures a familiar reality inside the EU institutions. Farmers may represent a shrinking share of Europe’s economy, but they remain one of its most powerful political constituencies, capable of reshaping trade deals, budgets and reform agendas even when they fail to block them outright. Ultimately, to get Mercosur over the line, Brussels had to back away from plans to loosen farmers’ grip on the EU budget and shift money to other priorities. PRESSURE THAT WORKS The leverage farm leaders wield rests on more than theatrics. Few officials in Brussels dispute that large parts of the sector are under real strain. Farm incomes are volatile. Costs for fuel, fertilizer and feed have surged. Weather has become harder to predict. Working days are long and isolation is common in hollowing rural communities. “I understand the anger,” Agriculture Commissioner Christophe Hansen told POLITICO in an interview last month, as Brussels prepared for tractors to roll into the EU quarter. Christophe Hansen said the Commission had “heard the concerns of farmers” and responded with “strong and unprecedented support measures.” | Photo by Omar Havana/Getty Images Sympathy for farmers runs high across much of Europe, tied not just to economics but to culture, place and identity. That has always made farm subsidies one of the most politically sensitive lines in the EU budget — and one the Commission knew would be hardest to touch. That sensitivity was on display again last week, when agriculture ministers traveled to Brussels for a hastily convened meeting outside the formal calendar, called in response to farmer protests only weeks earlier. Inside, the language was ritualistic. Praise for farmers. Assurances they were being listened to. Repeated references to unprecedented safeguards and financial backing. Hansen summed it up afterward, saying the Commission had “heard the concerns of farmers” and responded with “strong and unprecedented support measures.” REFORM MEETS REALITY This outcome marks a sharp reversal of earlier ambitions inside the Commission. It’s also a reminder of just how high the stakes are when farm subsidies are in play. The Common Agricultural Policy remains the single largest line in the EU budget, absorbing roughly a third of total spending and anchoring a political contract that dates back to the bloc’s postwar foundations. Public money, in exchange for food security and rural stability, has long been one of Europe’s core bargains. That bargain has survived decades of reform. The CAP has been trimmed, greened and made more market-oriented. But its central promise — that farming would be protected — has never disappeared. After von der Leyen’s re-election in 2024, officials quietly explored loosening how tightly farm spending is locked into the EU budget. Draft ideas for the post-2027 budget would have made farm funds more flexible and easier to redirect to priorities such as defense, climate transition or industrial policy. It was a technocrat’s answer to a crowded budget. It did not survive contact with politics. The proposal landed as farm incomes came under pressure from rising costs, climate volatility and disease outbreaks. Tractors returned to Europe’s streets. Agriculture ministers closed ranks, warning of political fallout in rural heartlands. Farm lobbies mobilized in force. Hansen spent much of his first year in office traveling to farms and meeting unions, describing agriculture as a strategic asset and warning of a “convergence of pressures” hitting the sector. Behind closed doors, he fought to keep large chunks of farm funding protected. Tractors park in front of the Arc de Triomphe during a demonstration of the French agricultural union Coordination Rurale (CR) in Paris, France, on January 8, 2026. | Jerome Gilles/NurPhoto via Getty Images Those efforts didn’t calm farmers’ anger. Instead, pressure became constant, feeding into a series of concessions that steadily narrowed the scope for reform. First came assurances that most farm spending would remain ring-fenced in the post-2027 budget. Then came a new rural spending target, designed to funnel more money back into countryside projects. Last week, to get the Mercosur deal over the line, the Commission went further, proposing that farmers get early access to up to €45 billion from a broader cash pot the EU would have been saving for a rainy day. In effect, much of the post-2027 EU farm budget is on track to be sealed at levels approaching today’s, before negotiations have even begun in earnest. LOSING THE TRADE FIGHT, WINNING THE POLITICS The €45 billion now being front-loaded was originally conceived as crisis insurance. After the Covid-19 pandemic and Russia’s invasion of Ukraine, Brussels concluded that future EU budgets needed more flexibility to respond quickly to shocks. Money reserved for incremental spending reviews was meant to be the first line of defense in the next crisis. If national capitals embrace the Commission’s proposal, much of that money would be locked in for farmers before the cycle even starts, leaving less for other priority areas. Mercosur became the perfect vehicle for that pressure. Long championed by industrial exporters, the deal turned into shorthand for everything farmers fear about global competition and loss of control. The reality is more uneven. Some EU farmers, particularly in high-end food, wine and dairy, stand to gain from better access to Mercosur markets. Others, especially in beef and poultry, face tougher competition. Yet even there, trade analysts have long dismissed fears of South American goods flooding the EU as exaggerated. But nuance rarely survives a protest banner, and even the unprecedented concessions haven’t stopped farmers from protesting. The EU’s largest farm lobby, Copa-Cogeca, said Friday that the process of getting the Mercosur deal across the line “erodes trust in European governance, democratic processes and parliamentary scrutiny at a time when institutional credibility is already under strain.” The group said it would continue mobilizing farmers. Privately, Commission officials express frustration about the farm lobbies’ hardening demands.  One said that even though Brussels bends over backwards to meet farmers’ demands, every concession still falls short for farm leaders. Another pointed to Commissioner Hansen’s efforts to engage in direct dialogue with farmers across the EU. “And still, they talk as if we had done nothing,” the official said, referring directly to Copa-Cogeca. For now, farm leaders are winning.  Von der Leyen might be boarding that plane to South America. But when she returns to Brussels, they will already be gearing up for the next fight, confident they can lose the trade battle and still bend Europe’s policy in their favor.

Europe’s biggest ever trade deal finally got the nod Friday after 25 years of negotiating.  It took blood, sweat, tears and tortured discussions to get there, but EU countries at last backed the deal with the Mercosur bloc — paving the way to create a free trade area that covers more than 700 million people across Europe and Latin America.  The agreement, which awaits approval from the European Parliament, will eliminate more than 90 percent of tariffs on EU exports. European shoppers will be able to dine on grass-fed beef from the Argentinian pampas. Brazilian drivers will see import duties on German motors come down.  As for the accord’s economic impact, well, that pales in comparison with the epic battles over it: The European Commission estimates it will add €77.6 billion (or 0.05 percent) to the EU economy by 2040.  Like in any deal, there are winners and losers. POLITICO takes you through who is uncorking their Malbec, and who, on the other hand, is crying into the Bordeaux. WINNERS Giorgia Meloni Italy’s prime minister has done it again. Giorgia Meloni saw which way the political winds were blowing and skillfully extracted last-minute concessions for Italian farmers after threatening to throw her weight behind French opposition to the deal.  The end result? In exchange for its support, Rome was able to secure farm market safeguards and promises of fresh agriculture funding from the European Commission — wins that the government can trumpet in front of voters back home. It also means that Meloni has picked the winning side once more, coming off as the team player despite the last-minute holdup. All in all, yet another laurel in Rome’s crown.  The German car industry  Das Auto hasn’t had much reason to cheer of late, but Mercosur finally gives reason to celebrate. Germany’s famed automotive sector will have easier access to consumers in LatAm. Lower tariffs mean, all things being equal, more sales and a boost to the bottom line for companies like Volkswagen and BMW. There are a few catches. Tariffs, now at 35 percent, aren’t coming down all at once. At the behest of Brazil, which hosts an auto industry of its own, the removal of trade barriers will be staggered. Electric vehicles will be given preferential treatment, an area that Europe’s been lagging behind on.  Ursula von der Leyen Mercosur is a bittersweet triumph for European Commission President Ursula von der Leyen. Since shaking hands on the deal with Mercosur leaders more than a year ago, her team has bent over backwards to accommodate the demands of the skeptics and build the all-important qualified majority that finally materialized Friday. Expect a victory lap next week, when the Berlaymont boss travels to Paraguay to sign the agreement. Giorgia Meloni saw which way the political winds were blowing and skillfully extracted last-minute concessions for Italian farmers after threatening to throw her weight behind French opposition to the deal. | Ettore Ferrari/EPA On the international stage, it also helps burnish Brussels’ standing at a time when the bloc looks like a lumbering dinosaur, consistently outmaneuvered by the U.S. and China. A large-scale trade deal shows that the rules-based international order that the EU so cherishes is still alive, even as the U.S. whisked away a South American leader in chains.  But the deal came at a very high cost. Von der Leyen had to promise EU farmers €45 billion in subsidies to win them over, backtracking on efforts to rein in agricultural support in the EU budget and invest more in innovation and growth.   Europe’s farmers  Speaking of farmers, going by the headlines you could be forgiven for thinking that Mercosur is an unmitigated disaster. Surely innumerable tons of South American produce sold at rock-bottom prices are about to drive the hard-working French or Polish plowman off his land, right?  The reality is a little bit more complicated. The deal comes with strict quotas for categories ranging from beef to poultry. In effect, Latin American farmers will be limited to exporting a couple of chicken breasts per European person per year. Meanwhile, the deal recognizes special protections for European producers for specialty products like Italian parmesan or French wine, who stand to benefit from the expanded market. So much for the agri-pocalpyse now.  Mercosur is a bittersweet triumph for European Commission President Ursula von der Leyen. | Olivier Matthys/EPA Then there’s the matter of the €45 billion of subsidies going into farmers’ pockets, and it’s hard not to conclude that — despite all the tractor protests and manure fights in downtown Brussels — the deal doesn’t smell too bad after all.  LOSERS Emmanuel Macron  There’s been no one high-ranking politician more steadfast in their opposition to the trade agreement than France’s President Emmanuel Macron who, under enormous domestic political pressure, has consistently opposed the deal. It’s no surprise then that France joined Poland, Austria, Ireland and Hungary to unsuccessfully vote against Mercosur.  The former investment banker might be a free-trading capitalist at heart, but he knows well that, domestically, the deal is seen as a knife in the back of long-suffering Gallic growers. Macron, who is burning through prime ministers at rates previously reserved for political basket cases like Italy, has had precious few wins recently. Torpedoing the free trade agreement, or at least delaying it further, would have been proof that the lame-duck French president still had some sway on the European stage.  Surely innumerable tons of South American produce sold at rock-bottom prices are about to drive the hard-working French or Polish plowman off his land, right? | Darek Delmanowicz/EPA Macron made a valiant attempt to rally the troops for a last-minute counterattack, and at one point it looked like he had a good chance to throw a wrench in the works after wooing Italy’s Meloni. That’s all come to nought. After this latest defeat, expect more lambasting of the French president in the national media, as Macron continues his slow-motion tumble down from the Olympian heights of the Élysée Palace.  Donald Trump Coming within days of the U.S. mission to snatch Venezuelan strongman Nicolás Maduro and put him on trial in New York, the Mercosur deal finally shows that Europe has no shortage of soft power to work constructively with like-minded partners — if it actually has the wit to make use of it smartly.  Any trade deal should be seen as a win-win proposition for both sides, and that is just not the way U.S. President Donald Trump and his art of the geopolitical shakedown works. It also has the incidental benefit of strengthening his adversaries — including Brazilian President and Mercosur head honcho Luiz Inácio Lula da Silva — who showed extraordinary patience as he waited on the EU to get their act together (and nurtured a public bromance with Macron even as the trade talks were deadlocked). China  China has been expanding exports to Latin America, particularly Brazil, during the decades when the EU was negotiating the Mercosur trade deal. The EU-Mercosur deal is an opportunity for Europe to claw back some market share, especially in competitive sectors like automotive, machines and aviation. The deal also strengthens the EU’s hand on staying on top when it comes to direct investments, an area where European companies are still outshining their Chinese competitors. Emmanuel Macron made a valiant attempt to rally the troops for a last-minute counterattack, and at one point it looked like he had a good chance to throw a wrench in the works after wooing Italy’s Meloni. | Pool photo by Ludovic Marin/EPA More politically, China has somewhat succeeded in drawing countries like Brazil away from Western points of view, for instance via the BRICS grouping, consisting of Brazil, Russia, India, China and South Africa, and other developing economies. Because the deal is not only about trade but also creates deeper political cooperation, Lula and his Mercosur counterparts become more closely linked to Europe. The Amazon rainforest  Unfortunately, for the world’s ecosystem, Mercosur means one thing: burn, baby, burn. The pastures that feed Brazil’s herds come at the expense of the nation’s once-sprawling, now-shrinking tropical rainforest. Put simply, more beef for Europe means less trees for the world. It’s not all bad news for the climate. The trade deal does include both mandatory safeguards against illegal deforestation, as well as a commitment to the Paris Climate Agreement for its signatories. 

BRUSSELS ― The EU’s behemoth trade agreement with South America’s Mercosur bloc was — once again — kicked down the road on Thursday, as familiar internal rifts again proved stronger than the push to seal the deal. An eleventh-hour turnaround from Italian Prime Minister Giorgia Meloni upended a self-imposed objective of signing the agreement with the Mercosur countries on Dec. 20 — pushing the decision to mid-January instead, POLITICO first reported. The delay shows that after two decades of negotiations and countless turn-arounds, the EU-Mercosur pact, designed to create one of the world’s largest free-trade areas between the EU, Brazil, Uruguay, Paraguay and Argentina, continues to be a political minefield in Europe.  Long-standing opposition from France, Poland and Italy, where farming constituencies are influential, has turned the deal into a test of Brussels’ ability to rally allies abroad while holding together a deeply divided bloc.  “Mercosur plays a central role in our trade agreements,” said European Commission President Ursula von der Leyen on her way into the leaders summit on Thursday morning, adding it was “of enormous importance we get the green light.” Yet Meloni derailed the carefully laid plan. Brazil’s President Luiz Inácio Lula da Silva said the Italian leader promised him on a call Thursday that she would support the deal as soon as she secured the backing of Italy’s farmers. Despite heaping pressure on Europeans in recent days, Lula ended up accepting the delay, the diplomats said. Meloni’s pushback meant there was not enough backing from EU countries for von der Leyen to fly to Brazil this weekend to sign the deal as planned — despite the huge political capital invested on each side in trying to finalize it by the end before Christmas. Even if Rome and Paris come around, the agreement’s troubles are far from over: The deal must still pass through the European Parliament, where opposition is mounting across the political spectrum. For all the warning that an extra delay would be fatal, countries in favor of the deal, such as Germany, were quick to downplay the setback.  “It seems certain that it [the Mercosur deal] will be signed in mid-January,” a senior German official told reporters. Brazil’s President Luiz Inácio Lula da Silva said the Italian leader promised him on a call that she would support the deal as soon as she secured the backing of Italy’s farmers. | Ton Molina/Getty Images The mid-January date is important, the official stressed, to get the agreement ratified before the Parliament has a chance to vote on a resolution to send the deal to the Court of Justice of the EU — which would risk freezing its ratification for up to two years. “I hope that our partners in Latin America will have the patience to deal with this tentative and hesitant EU,” said Bernd Lange, the chair of the European Parliament’s trade committee. Hans von der Burchard contributed reporting.

BRUSSELS ―European Commission President Ursula von der Leyen told EU leaders at their summit on Thursday that the Mercosur trade won’t be signed as scheduled on Saturday and instead would wait until next month, two EU diplomats told POLITICO. Brazil’s president Luiz Inácio Lula da Silva said he agreed to Italian Prime Minister Giorgia Meloni’s request to postpone the signature so she can reassure the country’s farmers that they wouldn’t be undercut by cheap poultry and beef, von der Leyen told the group, according to the diplomats. An eleventh-hour turnaround from Meloni threw into disarray a self-imposed objective of signing the agreement this week with the Mercosur countries, which includes Brazil, Argentina, Uruguay and Paraguay. Meloni asked the Brazilian leader for more time to back the agreement, which has been 25 years in the making, so she can secure domestic support in favor of the deal.