The EU has postponed signing a landmark trade agreement with South American nations after Italy requested more time to secure backing from its farmers, derailing plans to seal the deal before Christmas.

European Commission President Ursula Von der Leyen was due to fly to Brazil on December 20 to sign the pact with the Mercosur bloc — Argentina, Brazil, Paraguay and Uruguay — but the trip was cancelled after Italian Prime Minister Giorgia Meloni withdrew her support at an EU summit on December 18, Politico reported.

The postponement extends a negotiation process that has dragged on for more than 25 years, pushing the signing ceremony to mid-January and laying bare persistent divisions within the EU over agriculture policy.

Brazil's President Luiz Inácio Lula da Silva, a strong advocate of the deal, said Meloni had called him pledging to back the accord once she won over Italy's farmers. Lula accepted the delay despite having previously threatened to walk away from talks if the agreement was not finalised this month.

"This evening, we have achieved a breakthrough to pave the way for a successful completion of the agreement in January. We need a few extra weeks to address some issues with member states," von der Leyen said on December 19.

Meloni's backtracking left Brussels without the required backing from EU capitals. Under the bloc's rules, the commission needed support from at least 15 member states representing 65% of the EU's population to approve the deal.

Rome and, especially, Paris have spearheaded resistance to the pact, warning it would allow cheaper South American beef, poultry and other farm products to flood European markets. Germany, Spain and the Nordic countries have championed the agreement as a way to expand export opportunities and diversify away from China.

Italy's position has shifted in recent days. As recently as this week, Foreign Minister Antonio Tajani said Rome was prepared to sign the deal once questions around agricultural safeguards were resolved, telling a Milan conference: "It will be now or it will be January."

But by December 17, Meloni told parliament it was "still premature" to proceed with a signing this week, aligning herself with French President Emmanuel Macron's demands for additional time to finalise protections for European farmers.

The Italian government has found itself caught between Coldiretti, the influential farmers' lobby opposing the deal, and Confindustria, the main business federation that values the agreement at €14bn for Italy.

The postponement came after thousands of farmers from across the EU staged disruptive protests in Brussels on December 18. Demonstrators arrived in tractors, blocked traffic and launched fireworks in scenes of unrest near EU institutions. Police used tear gas and water cannon to disperse crowds who threw vegetables and set fires.

Macron said at the summit he had coordinated with counterparts from Italy, Poland, Belgium, Austria and Ireland on securing a delay. "Farmers already face an enormous amount of challenges," the French president said.

German officials sought to minimise the setback. A senior German government representative told reporters it appeared "certain" the accord would be signed in mid-January.

The agreement still faces significant hurdles even after signing, as it must navigate the European Parliament where resistance is building across party lines.

The pact would establish one of the world's largest free trade zones encompassing roughly 800mn people and represents the EU's most substantial agreement measured by tariff reductions. It would grant European manufacturers improved access to critical minerals such as lithium whilst opening South American markets to EU vehicles, machinery and alcoholic beverages.

Brussels has proposed enhanced safeguards and a compensation fund for farmers to win over reluctant member states. Last week, the European Parliament approved modifications to the commission's safeguard proposals, including accelerated investigations and reduced thresholds for activating protective measures against South American imports.

Von der Leyen attempted to reassure doubters on December 19. "With additional checks and safeguards, we have built in all necessary protections for our farmers and our consumers," she said.

Blocking the deal would require four member states representing at least 35% of the EU's population. With Poland already opposed and Belgium expected to abstain, Italy's stance is likely to determine whether opponents can reach that threshold.