Mercosur: Political Rent Over Competition – Il Sole 24 Ore
The Mercosur deal was not frozen because of legal uncertainty.
It was frozen because opening markets, increasing competition and stimulating growth threaten entrenched political rents.
This is not prudence. It is a strategy of paralysis.
Il Sole 24 Ore published my opinion piece on the political logic behind the European Parliament’s decision to refer the Mercosur agreement to the Court of Justice.
Mercosur: Political Rent Over Competition
The article argues that this move is not about safeguarding legality, but about preserving veto power and blocking competitive dynamics that would benefit consumers, industry and innovation.
The Mercosur agreement has become the symbol of a broader problem in Europe: using institutional procedures as a tool to delay decisions that would expose protected sectors and political interests to market discipline. What is presented as caution is, in reality, a form of political rent built on immobilism.
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This strategy has a concrete economic cost. Every delay acts as a hidden tax on European citizens and businesses: less competition, higher prices, weaker supply chains, fewer investments and slower innovation. These costs do not appear in public budgets, but they are paid daily by producers and consumers.
The numbers alone show what is at stake. The agreement involves Argentina, Brazil, Paraguay and Uruguay and would connect markets representing around 780 million people. In 2024, trade in goods between the EU and Mercosur exceeded €110 billion. According to the European Commission, tariff reductions under the agreement could save European companies more than €4 billion per year. For Italy, trade with the Mercosur area already exceeds €16 billion, largely driven by manufacturing, machinery, chemicals and agri-food processing.
CHECK IT OUT: WHY THE MERCOSUR IS STRATEGIC FOR THE EU
This is not an agricultural-only issue. It is an industrial and strategic one. European agriculture is deeply integrated into industrial value chains. Over 70% of EU agricultural output is destined for transformation. Access to competitive raw materials is a condition for the survival of the agri-food industry, not a threat to it. Blocking trade does not protect agriculture; it makes it more dependent on subsidies and less innovative.
There is also a geopolitical dimension. Latin America is becoming a central arena of competition between major powers. China is consolidating its economic presence through infrastructure and strategic investments. The United States is reshaping trade through subsidies and protectionist policies. In this context, Mercosur is one of the few instruments Europe has to project a model based on open, regulated markets and cooperation. Freezing it means surrendering strategic space.
DON’T MISS MY ANALYSIS: DELAYING THE MERCOSUR IS A STRATEGIC MISTAKE
The Court will assess legal compatibility. But law cannot replace political responsibility. When legal procedures are used to freeze competition and growth, they no longer serve integration; they serve paralysis. And today, paralysis is the most expensive form of economic policy Europe can choose.
