With tractors blocking highways and polls pointing to gains by the far right in European Parliament elections in June, French President Emmanuel Macron is under pressure to assuage farmers who are angry over rising costs and cheap food imports.
France has repeatedly expressed reservations about the EU-Mercosur deal and said its farmers have objected to the prospect it could allow in agricultural products, notably beef, that do not meet strict EU standards.
The European Union and the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay agreed on a trade accord text in 2019 after 20 years of on-off negotiations. Talks resumed after the EU sought assurances on climate change and deforestation.
The European Commission, which negotiates trade agreements on behalf of the 27-nation European Union, said talks with Mercosur counterparts had not ended and that there had been no order to EU negotiators to return early from last week's meeting in Brazil.
"The discussions are continuing and the European Union continues to fulfill its objective of achieving an agreement that respects our sustainability goals and respects our sensitivities, particularly in agriculture," a Commission spokesperson said.
Many farmers blame Macron and the European Union, which sets many agricultural rules, for their woes.
A French presidential adviser said on Monday the EU understood it was impossible to reach a deal in current conditions.
"It is our understanding it has instructed its negotiators to put an end to the negotiation session underway in Brazil and in particular cancel the visit of the Commission's vice-president that had been envisaged in view of a conclusion," the adviser added.
The Commission spokesperson said Commission Vice President Valdis Dombrovskis, who oversees trade, was ready to travel to Latin America if a deal was close.
"But on the basis of the last few meetings we have had that does not appear to be the case right now," the spokesperson said.
He added that Macron and Commission President Ursula von der Leyen had been in contact, but declined to comment on their talks.
Several other EU members back the deal, which would be the largest trade agreement for the bloc in terms of tariff reduction and part of the EU strategy of trade diversification following Russia's invasion of Ukraine and a desire to reduce its reliance on China.
"Contrary to common French practice, the EU does not in fact operate by presidential decree," said one EU diplomat.
EU governments and the European Parliament need to approve any trade deal the Commission has reached.
(Reporting by Philip Blenkinsop, editing by GV De Clercq, Emelia Sithole-Matarise and Sharon Singleton)
By Philip Blenkinsop
