Between Geopolitics and Political Economy: The European Union–Mercosur Negotiation to Form a Trade Agreement

Abstract

This article explores the reasons for the latest push to conclude the European Union (EU)–Mercosur agreement and what threatens its completion. I focus on three factors: the EU's geopolitical incentives, the EU's civil society organization (CSO) politicization and domestic political economy constraints. A longitudinal case study based on three pre‐specified stages reveals that the reduction of the opposition from Mercosur's expected distributional losers during the run‐up to the 2019 agreement, combined with higher geopolitical incentives in the EU from late 2022, paved the way for a successful renegotiation in 2023–2024 that reduced the EU's environmental CSO opposition. Furthermore, the combination of high geopolitical incentives and political economy constraints in the EU explains why the agreement's completion remains uncertain. This study informs debates on the ‘geopoliticization’ and ‘geoeconomic turn’ of the EU's trade policy by highlighting the tension between a geopolitically‐driven trade initiative and domestic political economy constraints.