TheEuropeanCommission appeared to have won the crucial support of Italy on Tuesday foracontentious free trade dealwith South American blocMercosur,paving the way for the EU to sign the agreement as early as next week.

Italy and France last monthdashed hopes for a December deal, saying they werenot ready to support ituntil farmers'fears of an influx of cheap commodities fromMercosur,includingbeef and sugar, were resolved.

However, Italian Prime MinisterGiorgia Meloniwelcomed a letter sent by the Commission on Tuesday proposing to accelerate 45 billion euros of support for farmers, describing it as a "positive and significant step forward".

Italian Agriculture Minister Francesco Lollobrigida said the European Union was now proposing to increase spending on Italian agriculture in 2028-2034 rather than to cut it.

An EU source subsequently said Italy would now vote in favour of theMercosurtrade deal at a meeting on Friday.

The executiveCommission,backedbycountriessuch as Germany and Spain, is seeking to garner the broad majority of 15 EU members representing 65% of the EU population required to authorise the EU signature, possibly as early as January 12.

Deal would be EU's largest in terms of tariff cuts

They say the accord, which has been 25 years in the making and would be the EU's largest in terms of tariff reductions, is vital to boosting exports hit byUS import taxesand to reduce reliance on China by securing access to critical minerals.

With Poland and Hungary opposed to the deal and France still critical, Italy's stance is a key determinant of whether the deal can be signed.

The Commission has held discussions with member states over the past two weeks and the bloc is on track to sign the agreement soon, a spokesperson for the executive said.

The EU executive has invited all 27 EU agriculture ministers to a meeting in Brussels on Wednesday.

European commissioners for agriculture, trade and health are expected to give reassurances on future funding for farmers under the bloc'sCommon Agricultural Policy, including a 6.3 billion euro ($7.4 billion) crisis fund in the next EU budget.

The Commission's move to merge regional cohesion funds and CAP money in the next seven-year budget has alarmed farming nations.

The Commission will also review import controls, including permissible maximum levels of pesticide residues, two EU diplomats said.

"It is a critical moment to discuss demands from farmers," one of the diplomats said.

(FRANCE 24 with Reuters)

Originally published on France24