The trade deal applies provisionally from 1 May, and the agreement is between the European Union and the Mercosur bloc: Argentina, Brazil, Paraguay, and Uruguay. According to the European Commission, the agreement will create a trading zone of around 700 million people.

Negotiations began in 2000 and reached a political agreement on 6 December 2024. EU countries formally endorsed the agreement on 9 January 2026.

The agreement still requires formal consent from the European Parliament before fully entering into force.

Key economic measures in the agreement

The agreement reduces tariffs on several EU exports to Mercosur countries, such as cars, machinery, and pharmaceuticals. Agri-food tariffs are also reduced on products such as chocolate, olive oil, cheese, wine, and spirits.

EU companies will be able to bid for Mercosur government contracts, and Brazil’s federal procurement market alone is estimated at more than 8 billion euros annually.

Critical raw materials and trade projections

According to the Commission, the agreement will help secure access to critical raw materials linked to the green and digital transition, and the document also highlights niobium imports used in superconducting magnets for MRI scanners and cancer treatment.

Commission estimates show that by 2040, the agreement could increase EU GDP by more than €77.6 billion and annual exports by up to 50 billion euros. The Commission also estimates that the agreement could support up to 600,000 jobs in Europe.

Expected impact on trade and exports

According to the Commission, the agreement will reduce trade barriers, create business opportunities, strengthen economic partnerships, and support rules-based trade.

In 2023, the EU exported 29 billion euros in services and accounted for 16.9 percent of Mercosur trade. In 2024, the EU exported 55 billion euros in goods to Mercosur countries. The document also states that the agreement could strengthen economic security, integrate value chains between regions, and support competitiveness in global markets.

Food safety and agricultural measures

The agreement also includes quotas and phased tariff reductions on several agricultural imports from Mercosur countries.

According to the European Commission, this includes 99,000 tons of beef imported at reduced tariffs, 180,000 tons of poultry imports to be phased in over five years, and 450,000 tons of ethanol restricted to chemical industry use.

The agreement also allows for 60,000 tons of rice imports and 45,000 tons of honey imports, both to be gradually phased in over a five-year period.

The Commission states that all imported food products must continue to comply with EU food safety and sanitary rules, including reinforced inspections, border controls, and continued EU authority over food safety standards.

Safeguards and sustainability commitments

The Commission says that a €6.3 billion safety net will be available under the EU’s next long-term budget in case of market disruption affecting farmers. This means safeguard measures can be introduced if import increases threaten EU agricultural sectors.

The agreement also includes commitments linked to the Paris Climate Agreement, biodiversity protection, tackling deforestation, workers’ rights, and responsible business conduct.

Existing trade relations with Latin America

The EU already has trade agreements with most Latin American countries, but the EU-Mercosur agreement expands trade relations specifically with the Mercosur bloc, which includes Argentina, Brazil, Paraguay, and Uruguay.

According to the European Commission, around 13 percent of EU imports in 2025 came from Mercosur countries, with main imports including agricultural commodities, livestock products, food-related goods, and crop-based exports.