A round of talks to reach a free trade agreement (FTA) between the EU and Mercosur ended without agreement, but negotiations will restart in 2019, a Commission spokesman has confirmed.
The two trade blocs met between 10 and 13 December in Uruguay, but "...more work is still needed at technical level, notably on the EU's outstanding issues, and meetings will resume under the Argentinian presidency of Mercosur," said the Commission spokesman.
Mercosur includes Brazil, Argentina, Paraguay and Uruguay, and operates under a six-month rotating presidency, currently filled by Uruguay.
The Commission spokesman added talks would resume under a new context for Mercosur, saying; "Following the elections in Brazil, a new president and government will be in place as of the beginning of January.
"The upcoming weeks will also allow Mercosur to implement the necessary adjustments to reflect these changes."
Negotiations have increasingly come under political pressure.
Germany's Angela Merkel said during the latest round of negotiations that the incumbency of Brazil's president-elect Jair Bolsonaro would make reaching a deal more difficult.
France's Emmanuel Macron also expressed discomfort towards the potential pact under Brazil's new political climate.
Recent discussions allowed "for some useful additional clarifications," the Commission spokesman told ICIS.
Outstanding problems from the perspective of EU negotiators have included rules dictating origin of product, including for machinery.
A recent document released by the European Union made no mention of previous stumbling blocks, including trade rules surrounding agricultural products and ethanol.
Brazil is one is the world's top ethanol producers next to countries like the US.
"For its part, the European Commission remains committed to a successful conclusion of an ambitious, comprehensive and balanced agreement with Mercosur," said the spokesman.
"We will spare no effort in that regard but we will only conclude when the conditions are met."
Venezuela's membership from Mercosur was fully suspended in December, according to Mercosur's website.