The 25-year wait is coming to an end: EU countries are accepting the Mercosur agreement

The representatives of the European Union member states cleared the way for the Mercosur free trade agreement with South American countries in Brussels on Friday.

A majority of the 27 EU member states, representing 65 percent of the Union’s population, have approved the proposal’s progress.

The aim of the agreement is to diversify trade in the midst of US tariffs and to strengthen EU countries’ relations with Brazil, Paraguay, Argentina and Uruguay by gradually removing import duties on more than 90 percent of products.

The agreement would create an integrated market area of ​​780 million consumers, which would become one of the largest free trade areas in the world.

From a European perspective, the agreement is expected to particularly benefit the export of industrial products. For example, when machinery and equipment exported to Mercosur countries are currently subject to import duties of 20 percent, the agreement will gradually reduce the duties to zero within 15 years.

Years of negotiation over

CEO of EK Jyri Häkämiehen according to the Mercosur agreement is a “big strategic victory” for Europe.

“Along with export trade, the Mercosur agreement emphasizes the far-reaching benefits of the geoeconomy for Europe. The creation of the agreement is an important breakthrough for the EU, which will help it negotiate trade relations with other new partners,” commented Häkämies.

According to the Commission’s estimate, EU exports to the Mercosur region may increase by up to 39 percent by 2040. The removal of customs duties alone brings savings of over four billion euros to the EU region every year.

The trade agreement has been discussed between the continents for 25 years. However, it has aroused widespread opposition, especially among farmers.

For example, France has refused to sign the agreement because it believes it will harm European agriculture. The president of the country Emmanuel Macron said on Thursday that France would not sign the agreement.

“France supports international trade, but the EU-Mercosur agreement is a product of another era, which has been negotiated for too long on the basis of too outdated premises,” he wrote on the social media platform X on Thursday.

The agreement has also been opposed in Ireland and Poland. Italy was opposed to it before, but eventually became a supporter.

President of the European Commission Ursula von der Layenin is expected to sign the agreement on January 12 in Paraguay.

However, the final stamp on the agreement is needed from the European Parliament, which is scheduled to vote on the matter at the turn of January-February. If EU approval is achieved then, the trade agreement can enter into force and be used by companies at the end of 2026.