Interest in creating a free-trade zone representing 750 million people with annual commerce worth nearly €100 billion ($123 billion) has grown since the start of the financial crisis and delays to the Doha round of world trade talks.
Mercosur - Brazil, Argentina, Paraguay and Uruguay - and the 27-country EU will hold a first round of talks in July.
"We relaunched the negotiations because we are quite convinced we can make them lead to an ambitious, balanced, association agreement," José Manuel Barroso, president of the European Commission, told a news conference.
The relaunch was strongly criticised by European farmers. Many EU farm ministers earlier on Monday in Brussels warned against reviving the talks, saying a deal would put thousands of European farmers out of business.
But Barroso, speaking after talks with the Mercosur countries in Madrid, said both sides would have to make concessions for an agreement to be reached.
When the talks were suspended in 2004, Mercosur countries expressed dissatisfaction with the EU's offer of access to agricultural markets.
At that time, the EU was seeking proposals from Mercosur on opening the South American bloc's telecommunications market and protection for EU industries.
Any deal would be likely to involve Europe cutting its import tariffs for agricultural imports in return for greater access to Mercosur's services and telecoms markets.
Exodus
European farmers' union Copa-Cogeca said in a statement that such a deal would put further pressure on farmers' incomes and cause an exodus from the sector and from rural areas.
"The EU Commission's proposal to relaunch the trade talks is totally unacceptable. A bilateral trade agreement with Mercosur will cause a sharp rise in beef, poultry, wheat, citrus fruit/juice imports to the EU from these countries," said the union's president, Paolo Bruni.
At the start of a meeting of EU farm ministers in Brussels, French Agriculture Minister Bruno Le Maire reiterated his country's opposition to a deal, which was outlined last week in a declaration signed by seven other EU states.
"I don't see why agriculture always has to be the bargaining chip in Europe's trade negotiations [...] especially when a certain number of South American countries, notably Argentina, are putting new protectionist tariffs on food imports," he said.
Le Maire warned ministers that removing EU import tariffs on agricultural products from Mercosur countries would lead to a 70% jump in imports of beef and a 25% rise in poultry imports.
On Monday several other EU countries came out against the negotiations in addition to the eight that signed last week's joint declaration, bringing the total to "about 15", one EU source said.
Impact assessment
Consensus emerged in the meetings that the European Commission should assess the impact of any deal between the EU and Mercosur before it is signed, and that it should not undermine progress in the stalled Doha round.
"It's a sensitive issue for agriculture," EU Farm Commissioner Dacian Cioloş said. He added it was too early to say what the impact on EU farmers could be.
"It's only a relaunch of negotiations, and as you know these talks take lots of time. We have to see what Mercosur's position is and what they put on the table," Cioloş said.
