In December 2025, amid ongoing delays to the trade agreement between the European Union and the Mercosur bloc (Brazil, Argentina, Uruguay, Paraguay), a narrative about an alleged strategic blunder is gaining traction in Germany. Experts such as Günther Maihold of Freie Universität Berlin warn that if Europe does not sign the deal, China will fill the gap and consolidate its dominance in Latin America. Maihold's interview with Inforadio.de on December 20 emphasizes that Germany, as an exporter, is losing an opportunity to expand, while Beijing stands to emerge as the winner.
The EU-Mercosur agreement, negotiated for over 25 years, was meant to regulate trade with the South American nations. At the most recent EU summit on December 18–19, it was once again shelved, which Maihold interprets as "a lack of seriousness toward a very important issue, pointing to South America's chronic disappointment with Europe."
"For Europe, including Germany, Mercosur is not just a market but a source of critical raw materials. Argentina offers lithium and copper, essential for Germany's Energiewende — its energy transition," Maihold emphasizes.
The German narrative highlights economic benefits. It is primarily the automotive industry — companies like Volkswagen and BMW — that sees Mercosur as a vast market for expansion. "On the other hand, South America would gain access to the EU market for agricultural products, such as soy and meat from Brazil and Argentina. However, opposition within the EU, especially from farmers and the food processing industry, is blocking Germany's plan."
In Germany, the Mercosur narrative intertwines ecology with geopolitics. The Greens and farmers criticize the agreement for lacking environmental guarantees, such as protections against Amazon deforestation. Maihold acknowledges that these concerns are justified.
Chancellor Friedrich Merz and the coalition government (CDU/SPD/Greens) are balancing between export interests and domestic pressure. Rejecting the agreement would be, according to German experts, "a defeat."
A pivotal element of the German narrative is the role of China. Beijing is already Mercosur's largest trading partner, investing in infrastructure and raw materials. Maihold states plainly: if the EU walks away, China will strengthen its position. China is seeking access to lithium (for EV batteries) and copper, competing with Europe. In Argentina, Chinese firms are building mines; in Brazil, ports. Delaying Mercosur means South America will turn toward Beijing, weakening EU influence.
Geopolitically, this represents a loss for the West. China, through the Belt and Road Initiative, is penetrating the region economically — a development Maihold sees as a threat to "European values." Germany fears that without the Mercosur agreement, Latin America will become a Chinese sphere of influence, undermining the EU's global standing.
Maihold's narrative reflects a broader debate in Germany — from think tanks like DGAP to media outlets such as FAZ and Süddeutsche Zeitung. Experts are calling for compromise: strengthening the environmental clauses, because otherwise Europe will lose ground to China. The German narrative underscores that rejecting Mercosur is not merely an economic own goal but a geopolitical gift to China.
