After 25 years of difficult negotiations, EU member states gave the agreement with Mercosur countries the green light on Friday, opening the way to a free-trade area covering more than 700 million people in Europe and Latin America.
According to information reported at the time, the agreement was due to be signed in Paraguay on 17 January.
It provides for the removal of more than 90% of tariffs on European exports.
European consumers would gain access to products such as Argentine beef, while Brazilian import duties on German cars would fall substantially.
Despite the political controversy, its purely economic impact is relatively limited. The Commission estimates it would add approximately €77.6 billion to the EU economy by 2040, equivalent to around 0.05% of GDP.
As with other major agreements, Politico's analysis identifies winners and losers.
Winners: Giorgia Meloni
Italy's Prime Minister Giorgia Meloni secured last-minute concessions for Italian farmers after threatening to support France's opposition.
In return for Rome's backing, Italy obtained agricultural-market safeguards and commitments to new farming finance from the Commission, which the Government can present domestically.
Germany's car industry
German manufacturers gain easier access to Latin American markets.
Tariffs currently reaching 35% will fall progressively, supporting sales and revenues for companies such as Volkswagen and BMW.
Barriers will not disappear overnight, following requests from Brazil, which has its own car industry.
Electric vehicles will receive preferential treatment in a sector where Europe has been lagging.
Ursula von der Leyen
For Commission President Ursula von der Leyen, the agreement represents a difficult but important victory, strengthening Brussels internationally at a time when the Union has appeared slow to keep pace with the United States and China.
After more than a year spent reassuring sceptics and assembling the necessary qualified majority, she was expected to sign the agreement in Paraguay the following week.
The price included commitments to €45 billion in agricultural subsidies, reversing earlier plans to limit support.
European farmers
Farmers have strongly opposed the low prices of South American products, fearing pressure that could drive European producers off their land.
The analysis nevertheless argues that the picture is less bleak than it first appears.
Strict quotas apply to products including beef and poultry, limiting the quantities Latin American farmers can export.
Special protections are also provided for European geographical indications, such as Italian Parmesan and French wine.
Together with the promised €45 billion in subsidies, these provisions may make the outcome less adverse for European agriculture than critics fear.
Losers: Emmanuel Macron
French President Emmanuel Macron consistently opposed the agreement under pressure from France's farming sector.
His failure to block it, despite attempts to assemble allies and apparent progress in winning over Meloni, is seen as another political setback as his European influence appears to weaken.
Further criticism in French media was expected after the defeat.
Donald Trump
For the US President, days after the Venezuela operation and Maduro's capture, the agreement demonstrates that Europe still possesses substantial soft-power tools for constructive cooperation with like-minded partners.
In contrast with Trump's trade pressure and unilateral action, the EU–Mercosur deal strengthens figures and partnerships that do not serve his strategy, including Brazilian President and Mercosur leader Luiz Inacio Lula da Silva.
China
China significantly increased its presence in Latin America, particularly exports to Brazil, while EU negotiations stalled.
The agreement gives Europe an opportunity to regain market share in cars, machinery and aerospace, and strengthen the region's political links with the West.
It also reinforces the EU's position in direct investment, where European companies still lead their Chinese competitors.
Politically, China has had some success in drawing countries such as Brazil away from Western positions, including through BRICS, which comprises Brazil, Russia, India, China, South Africa and other emerging economies.
Because the agreement goes beyond trade to deepen political cooperation, Lula and his Mercosur counterparts will have closer ties with Europe.
The Amazon
The agreement's darkest concerns relate to the environment.
Expanding beef production threatens to accelerate Amazon rainforest clearance. Greater beef demand from Europe could mean fewer trees globally.
The text includes provisions against illegal deforestation and commitments under the Paris climate agreement, but concern about the environmental consequences remains substantial.
