Published by Global Banking and Finance Review
Posted on January 7, 2026
By Philip Blenkinsop and Kate Abnett
BRUSSELS, Jan 7 (Reuters) - The European Commission said on Wednesday it would cut import duties for certain fertilisers and drive forward a law that could allow temporary suspensions to the EU's carbon border levy as it sought to win over opponents of its free trade agreement with South American bloc Mercosur.
The concessions are part of an attempt by the Commission, backed by countries such as Germany and Spain, to garner the majority of 15 EU members representing 65% of the EU population to authorise the signing of the Mercosur deal, possibly next week. It would still need to win the support of the European Parliament to enter into force.
European Trade Commissioner Maros Sefcovic told a news conference that the EU would remove 6.5% standard duties on urea and 5.5% on ammonia and would also encourage legislators to enact a law that could allow temporary exemptions to its carbon border levy.
France and Italy both urged the EU executive on Wednesday to exclude fertilisers from the carbon border levy, which came into force on January 1 and imposes CO2 emission fees on imports of steel, fertilisers and other goods to ensure they do not have an unfair advantage over products made in Europe.
Proponents of the Mercosur trade deal, which was 25 years in the making, say it would be the EU's largest in terms of tariff reductions and is vital to boosting exports hit by U.S. import taxes and to reducing reliance on China by securing access to critical minerals.
European commissioners for agriculture, trade and health sought to reassure ministers at a meeting on Wednesday on future funding for farmers and on a review of import controls, including permissible maximum levels of pesticide residues.
ITALY AND FRANCE PREVENTED DECEMBER SIGNING
Italy and France, the EU's largest agricultural producers, last month dashed hopes for a December signing, saying they were not ready to support the pact until farmers' fears of an influx of cheap commodities from Mercosur, including beef and sugar, were addressed.
On Tuesday, the Commission appeared to have won the support of Italy after proposing to accelerate 45 billion euros ($52.61 billion) of support for farmers.
Poland and Hungary remain opposed to the deal, and France is still highly critical.
Ireland, a major beef producer and exporter, has suggested it could back the deal. Prime Minister Micheal Martin said on Wednesday that Ireland was working with "like-minded" countries, including Italy and France, and that safeguards against potential import surges were essential to winning support.
"There's further work to be done before the discussions across government on this... We have concerns with Mercosur, but a lot of progress has been made over the last 12 months," Martin told reporters on a trip to China.
French Agriculture Minister Annie Genevard was not convinced, saying the EU needed to weigh up the cost of multiple trade deals on the farming sector. France, she said, would not support the Mercosur accord.
($1 = 0.8554 euros)
(Reporting by Philip Blenkinsop; additional reporting by Padraic Halpin in Dublin, Sybille de la Hamaide and Gus Trompiz in Paris; editing by Barbara Lewis and Jane Merriman)
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the day-to-day operations of the EU.
The Common Agricultural Policy (CAP) is a policy framework set by the EU to support farmers, promote sustainable agriculture, and ensure food security across member states.
Tariff reductions refer to the lowering of taxes imposed on imported goods, which can encourage trade by making foreign products more competitive in the domestic market.
The European Parliament is one of the key legislative bodies of the European Union, representing EU citizens and responsible for debating and passing European laws.
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