Ursula von der Leyen: The Mercosur agreement strengthens the EU amid instability

From the reader. After more than 25 years of negotiations, the European Union and Mercosur have reached a historic partnership agreement that brings the regions closer together and benefits nearly 700 million citizens in the EU, Argentina, Brazil, Paraguay and Uruguay.

The agreement creates one of the world’s largest trade areas, covering 31 countries and almost a fifth of the world’s GDP. It strengthens connections between like-minded regions at a time when international trade faces increasing challenges, such as tightening customs tariffs and trade restrictions. The agreement affects not only its parties, but also the entire global economy.

The European Parliament started discussions on the agreement last week and bears its democratic responsibility for the final approval. The agreement deserves broad support, as it brings benefits to all EU countries.

Duties of billions of euros will be removed

The agreement removes billions of euros worth of tariffs, opens up the public procurement market and gives companies the predictability they need to plan their operations, expand and invest.

The 60,000 European companies that already export their products to the Mercosur region will benefit immediately and save an estimated four billion euros annually in export duties. Many others, especially small and medium-sized companies, will have easier access to fast-growing markets, which will encourage new investments, accelerate growth and support quality jobs in Europe.

The agreement increases economic growth on both continents. An example is the trade agreement between the EU and Canada, after its entry into force, bilateral trade has grown by more than 70 percent and strengthened Europe’s supply chains of critical materials.

The agreement between the EU and Mercosur is expected to produce similar benefits, and EU exports are estimated to increase by up to 50 billion euros. These figures represent concrete success stories for companies and communities across Europe.

Both parties benefit

The economies of the EU and Mercosur complement each other. Europe needs key raw materials for the green and digital transition, such as lithium, iron ore and nickel, whose reserves in Latin America are the largest in the world. The Mercosur countries, on the other hand, need stable investments, technology and more diverse markets – this is exactly what Europe offers.

As a result, Latin America moves up the value chain from mining to refining, creating better jobs and more sustainable industries. For Europe, this means new opportunities for companies and supply security for critical materials.

The agreement also benefits European agricultural producers. The export of EU agricultural products is expected to grow by almost 50 percent. In addition, Mercosur countries recognize more than 350 European geographical indications, such as Comté cheese, Prosciutto di Parma ham, Cava wine and Polska Wódka vodka, which receive strong name protection throughout Latin America.

The agreement opens up significant new opportunities for EU food and beverage exports and ensures that food imported into the EU meets strict European health and safety requirements. In addition, strong protective measures have been ensured for sensitive agri-food sectors with mechanisms that can limit imports from Mercosur if necessary. In this way, all sectors of the EU economy – including agricultural producers – can confidently support the agreement.

The EU communicates that it is stable and reliable

The importance of the agreement extends beyond financial aspects. It is a strategic signal at a time when geopolitical confrontation and fragmentation are increasing. EU and Mercosur choose cooperation instead of competition and partnership instead of polarization.

The agreement shows that fast-growing economies around the world want strong trade and investment relations with Europe, because the EU remains a stable and reliable partner.

In a world of increasing economic uncertainty and geopolitical fragmentation, the EU and Mercosur are building relationships based on trust, based on stability, predictability and the rule of law. The agreement provides a framework for cooperation in combating global challenges, such as climate change and deforestation, as well as in strengthening international institutions.

It’s more than just a trade deal – it’s a declaration from two like-minded regions committed to shaping a more open, predictable and cooperative global economy.

Signing the agreement in today’s world, marked by conflicts and protectionism, sends a clear message: World trade can continue to be based on trust and common interests and bring tangible benefits to citizens and economies.

Ursula von der Leyen

President, European Commission