European Union And Mercosur Sign Trade Agreements

31 Mar European Union And Mercosur Sign Trade Agreements

The start of 2026 saw the European Union (EU) and Mercosur (Argentina, Brazil, Paraguay and Uruguay) sign a Partnership Agreement (EMPA) and Interim Trade Agreement (iTA).

Whilst Mercosur has been a substantial market for EU exports, worth €55 billion in goods in 2024, it was the only major trading partner in Latin America that did not have a preferential trade agreement with the EU.

Conversely, the EU is Mercosur’s second-biggest trade in goods partner, after China and ahead of the United States, accounting for 16.9% of Mercosur’s total trade in 2023.

With a market of over 295 million people across Mercosur, there is huge potential for the EU to leverage this market via these agreements. In addition, the EU is the biggest foreign investor in Mercosur, with a stock of €390 billion in 2023.

These agreements aim to benefit both the EU and Mercosur, creating opportunities for growth, jobs and sustainable development on both sides.

However, subsequent to the announcement of these trade agreements, the European Parliament has requested the European Court of Justice (ECJ) assess the legal basis of the EU-Mercosur Partnership Agreement.

Whilst the European Commission has provided detailed explanations confirming the Agreement’s full compatibility with the EU Treaties, the decision of the European Parliament to seek the Court of Justice’s opinion on the compatibility of the EU-Mercosur Agreement with the EU Treaties will result in a delay of 18 to 20 months in the ratification process, creating unnecessary uncertainty for businesses, in a time of increasing geopolitical and economic challenges.

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