The issue is this sends a negative message to Mercosur member states like Brazil, who are actively being wooed by the US such as by creating a US-Brazil Rare Earths Deal [0] and wooing Brazilian oligarch Batista brothers [1] (the oligarchs who owns much of Brazil's and North+South American agricultural capacity [2] and are the power behind the throne in Brazil) to get near-exclusive rights on distributing Venezuelan oil [3].

Now that the deal is de facto frozen, any remaining goodwill between Mercosur states and the EU will burn away (especially because Lula put his personal reputation on the line right before a highly contested election in Brazil and because Spanish politicians constantly meddle in South American culture wars [4] due to familial, financial, and linguistic ties), leaving the EU even more alone in an already lonely and dangerous world.

> although hopefully not compromising on "environmental and consumer health policies", that'd be a blunder of it's own.

This kind of stubbornness is why the EU is increasingly being isolated globally. Either make pragmatic deals on your own terms or end up being forced to by other countries on their terms.

[0] - https://www.ft.com/content/401a9e84-3034-4375-bf39-56b92500c...

[1] - https://www.reuters.com/business/energy/brazil-billionaire-b...

[2] - https://www.ft.com/content/d293237e-e39f-4f4c-89e7-4c52cf937...

[3] - https://www.bloomberg.com/news/articles/2026-01-19/irmaos-ba...

[4] - https://apnews.com/general-news-d45baf0e625d4e0fa540b7a472bc...