Brazil threatens to walk if EU delays Mercosur deal

EU PLANS to seal a vast trade deal with South American bloc Mercosur this week were thrown into disarray Wednesday after Italy joined fellow heavyweight France in seeking a delay.

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The last-mile upset drew a stern rebuke from Brazil's President Luiz Inacio Lula da Silva, who told his EU partners the time to close the deal was now or never.

"I've already warned them: if we don't do it now, Brazil won't make any more agreements while I'm president," Lula told a cabinet meeting. "We have given in on everything that diplomacy could reasonably concede."

Twenty years in the making, the pact to create the world's biggest freetrade area is backed by Germany and many of the EU's 27 nations, keen to diversify trade in the face of US tariffs.

The deal would allow the EU to export more vehicles, machinery, wines and spirits to Latin America, while facilitating the entry of South American beef, sugar, rice, honey and soybeans into Europe.

Fearing negative fallout for its agricultural sector, France has long been a holdout, but had failed to muster enough support to block the accord - until now.