The European Union (EU) and the South American trade bloc Mercosur reached a free trade agreement in principle in 2019. The planned deal was announced on 28 June at the 2019 G20 Osaka summit after twenty years of negotiations. Once ratified, both the EU and Mercosur will gradually reduce import duties on 91–92% of exports over a 15-year period, and increase import quotas for various products. The agreement was provisionally applied on 1 May 2026.
Once ratified, it will represent the largest trade deal struck by both the EU (449 million inhabitants) and Mercosur (260 million inhabitants), in terms of numbers of citizens involved. The trade deal is part of a wider EU Association Agreement between the two blocs. Besides trade, the association agreement also deals with cooperation and political dialogue. Negotiations on these two parts were concluded on 18 June 2020.
Proponents say the agreement will diversify trade, reducing reliance on China and the United States, thus also lessening the impact of tariffs imposed by the second Donald Trump administration. Proponents in the EU also note that the agreement will boost exports in EU industrial goods (including automobiles) and agricultural products, such as cheese and wine. Critics, most notably some in the European agricultural sector, oppose increased free trade in the agricultural sector and call for protectionism for European farmers. Within the EU, France, Italy, Hungary, and Poland have been most opposed to the agreement, while Germany, Spain, and Nordic countries have been highly supportive. To calm the concerns of protectionist farmers, the EU Commission announced it would expand an emergency fund for European farmers affected by market disruptions, and set up legal instruments that would allow farmers to suspend the agreement if they can prove that the agreement harmed them.
On 6 December 2024, an agreement on the free trade deal was announced; the vote was delayed until early 2026 due to a request from Italy which needed more time to assuage its farmers. On 9 January 2026, a qualified majority of EU member states in the Council of the EU gave the green light to the agreement by a vote of 21 to 5, with Austria, France, Hungary, Ireland, and Poland voting against it, and Belgium abstaining. A signing ceremony took place on 17 January in the Central Bank of Paraguay. The agreement still needs to be approved by both EU and Mercosur parliaments. On 21 January 2026, the European Parliament approved a measure by a vote of 334–324 to ask the European Court of Justice to rule on whether the free trade agreement between the EU and Mercosur can be applied before full ratification by all member states and whether its provisions restrict the EU's ability to set environmental and consumer health policies, a move that could delay the deal by two years. The agreement provisionally applied on 1 May 2026.
Background The agreement in principle came after twenty years of negotiation. Talks began in 1999, but stalled before regaining momentum in 2016. Talks had floundered for years due to opposition from European beef producers, especially small farmers who feared being undercut on price by imports from Brazil, the world's biggest beef producer. Many governments in South America at this time preferred "south-south co-operation" to developing ties with Europe, while European governments similarly had other priorities.
The growing use of protectionist policies by national leaders is considered to have spurred the renewal of talks in 2016. The EU may have hoped that the emerging deal would represent a significant break in this global renewal of protectionism. European Commission President Jean-Claude Juncker cited the deal as an endorsement of "rules-based trade" in a time of growing protectionism. Mercosur may be hoping to use the deal as a model for future ones. Mercosur's presidents have already stated that they want to reach trade agreements with Canada and the European Free Trade Association. In 2019, Argentina's president Mauricio Macri said that the agreement with the EU is "not a point of arrival but of departure".
In 2018, the EU was already Mercosur's largest trading and investment partner. 20.1% of the trade bloc's exports went to the EU in 2018. Mercosur exports to the EU were worth €42.6 billion in that year, while EU exports to the Mercosur countries were worth €45 billion. Mercosur's biggest exports to EU countries are agricultural products such as food, beverages and tobacco, vegetable products including soya and coffee, and meat and other animal products. Europe's biggest exports to Mercosur include machinery, transport equipment, and chemical and pharmaceutical products. The EU exported €23 billion worth of services to the South American trade bloc in 2017 while about €11 billion worth of services came from Mercosur into Europe. Despite the value of the trading, significant tariffs remain in place, meaning potential expansion of markets should these tariffs be removed. The EU wants more access for its manufactured goods especially cars, which face tariffs of 35%, and more access to contracts for its firms and wine and cheese to sell. The primary aim of the Mercosur countries is to boost sales of farm commodities.
Features The combined population of the two regions means that the deal would involve 780 million people. It would be the largest free trade deal agreed by Mercosur since the bloc's launch in 1991 and would also represent the EU's largest trade deal to date, in terms of tariff reduction. For Mercosur the planned deal will eliminate 93% of tariffs to the EU and grant "preferential treatment" for the remaining 7%. The deal will allow increased access to the European market for Mercosur's agricultural goods, notably beef, poultry, sugar and ethanol. The deal will probably also be good for Brazilian juice exporters and Argentine fish exporters. It will also remove 91% of tariffs on EU exports to the Mercosur countries. According to the Financial Times, "some of the most important wins for Europe include the slashing of duties on cars and car parts, chemicals, machinery and textiles, and improved market access for EU wine and cheese". €4.5 billion worth of duties will be saved, according to the European Commission. The deal includes a standstill clause whereby remaining tariffs will not be raised above an agreed rate.
The scope of the agreement is very broad.New EU-Mercosur trade agreement. The agreement in principle Brussels, 1 July 2019 Besides tariffs, it covers Rules of Origin, Trade Remedies, Sanitary and Phytosanitary Measures (SPS), Technical Barriers to Trade (TBT), Services and Investment liberalization, Competition Policy, Subsidies, State Owned Enterprises (SOE), Trade and Sustainable Development. It also includes increased access to public procurement contracts and Intellectual Property Rights including "Geographical Indications" or protection for regional food specialities. Legal guarantees will be put in place protecting 357 European food and drink products from imitation including Prosciutto di Parma and Fromage de Herve. Customs procedures will also be simplified under the deal. If ratified, the changes will be phased in over 15 years.
Status of Bolivia and Venezuela Bolivia, which joined Mercosur in July 2024, is not a party to the agreement as the negotiations were completed prior to its accession. Venezuela, a Mercosur member suspended since 2016 due to complaints about its economy and human rights record, is also not a party.
Support In February 2024, German Chancellor Olaf Scholz said that "we need such agreements because they play a major geostrategic role". In June 2024, during a meeting in Berlin, Olaf Scholz and Argentine President Javier Milei expressed support for a free trade agreement between the EU and Mercosur. Luiz Inácio Lula da Silva, the president of Brazil, called on the EU to finish the paperwork while saying "Without political will and courage from leaders, it won't be possible to finish a negotiation that has dragged for 26 years" at a meeting of the bloc at Foz do Iguaçu on 20 December 2025.
Opposition The planned deal has been denounced by scientists, trade unions, NGOs, European beef farmers, environmental activists, and indigenous rights campaigners. Protests against the deal have taken place. Governments and parliaments of the EU members states have also criticised the agreement. In October 2020, both the European Parliament and the European Commissioner for Trade Valdis Dombrovskis have stated that the EU-Mercosur agreement "cannot be approved as its stands".European Parliament resolution of 7 October 2020 on the implementation of the common commercial policy – annual report 2018 (2019/2197(INI)) see paragraph 36European Parliament, Committee on International Trade, Hearing of Valdis Dombrovskis, executive vice-president of the European Commission and commissioner-designate (Trade) (see among others paragraphs 1-013, 1–027, 1–059 en 1-061)
European farmers
The deal is expected to trigger a huge surge of Argentine and Brazilian beef exports to all EU countries. Under the agreement, the EU will open its markets to a quota of up to 99,000 tonnes of beef per year at a preferential rate of 7.5% tariffs. Farmers throughout the EU oppose this, particularly smaller farmers who fear being undercut on price. The COPA-COGECA union, which represents 23 million farmers across the EU, warned the deal "will go down in history as a very dark moment". The Irish Farmers' Association denounced the deal as a "disgraceful and feeble sell-out".
Food standards Recently, Brazilian beef imported into Europe was found to contain banned hormones and was confirmed to have entered the Irish food chain. Ireland fears the Mercosur deal will undermine confidence in EU's food standards. France has the same concerns, having strict food regulations within its own country. French farmers are protesting due to unfair competition from countries with looser regulation.
Environmentalists
NGOs criticize the agreement being focused on sales of cheap meat and soy from South America into the EU on one hand and large sales of pesticides and cars from the EU to the Mercosur on the other. Scientists fear the environmental impact of those very goods, having a negative impact on global carbon dioxide output pushing climate change. French economists Charlotte Emlinger and Mathieu Parenti conclude that deforestation is a concern. Stanford economist Bard Harstad argues that if the tariffs were contingent on forest cover, the agreement could induce forest conservation instead of deforestation.
Conventional meat production and soy cultivation in the Mercosur goes together with destruction of the Amazon rainforest, which is one of the world's largest carbon sinks. While inside some EU countries there is already meat overproduction. Use of pesticides increases global loss of biodiversity and cause health risks for human beings. Intensified utilization of cars is criticized since fossil fueled cars amplify climate change. The expected effects oppose the European Green Deal and the international Paris Climate Agreement. The amount of carbon that the Amazon is absorbing from the atmosphere and storing each year has fallen by around a third in the last decade. This decline in the Amazon carbon sink amounts to one billion tonnes of carbon dioxide – equivalent to over twice the UK's annual emissions.
Undermining law Even though the EU was trying to limit imports of products deriving from forest destruction by law, sugar cane and chicken meat are excluded from that very law. BASF and Bayer and other chemical companies are already selling large amounts of pesticides and toxins in non-EU countries which are illegal inside the EU.
Recent historical framing