The European Union and Mercosur have signed an Economic Partnership Agreement (EMPA) and an Interim Trade Agreement (iTA), concluding a process that has been ongoing since 1999, considering the official date. According to the European Commission, this agreement represents a historic milestone between the two regions and an ambitious platform to strengthen their economic, diplomatic, and geopolitical relations.
The signing of the agreement will create one of the world’s largest free trade zones, translating into a market of approximately 700 million consumers.
The European Commission estimates that it will cause a 39% increase in annual exports to Mercosur (an approximate value of 49 billion euros), in addition to supporting hundreds of thousands of jobs in the EU.
According to the BBC, the President of the European Council, António Costa, celebrated the signing of the agreement in an “increasingly turbulent” world, and the President of the European Commission, Ursula von der Leyen, reinforced the role of alliances in creating “fair trade instead of tariffs,” in a clear allusion to the policies of the Trump administration.
“Today, two like-minded regions open a new chapter of opportunities for more than 700 million citizens. With this mutually beneficial partnership, we both stand to gain – economically, diplomatically and geopolitically. Our companies will generate exports, growth and jobs. We will support each other in our transitions to a clean and digital economy. And our signal to the rest of the world is clear: the EU and Mercosur are opting for cooperation instead of competition and for partnership instead of polarization,” stated von der Leyen.
The Brazilian government, through an official statement from the Ministry of Development, Industry, Trade and Services (MDIC), celebrated the agreement: “For Mercosur, [the agreement] implies preferential access to the EU, the third largest global economy, a market of 450 million people and approximately 15% of the world’s GDP.”
In the geopolitical sphere, the EU and Mercosur reinforce multilateralism and the rules-based international order, cooperation, dialogue, and international partnerships.
Savings and Security
The EU expects to save €4 billion annually in export tariffs on agri-food products and essential industrial goods, such as automobiles, machinery, and pharmaceuticals, for example.
Furthermore, the EU believes there will be increased investment security in essential supply chains, including critical raw materials and related goods, as well as economic security and support for digital and green transitions on both sides.
On the EU and Mercosur sides, there is a commitment to defining global trade rules in accordance with the highest EU standards. Agriculture
One of the sectors that has raised the most obstacles and protests is agriculture. However, the European Commission assures that European farmers and food producers will benefit from the agreement, stating that it will allow for an increase in EU agri-food exports to Mercosur by up to 50%.
According to the European Commission, this will be possible by reducing tariffs on essential EU agri-food products (wine, spirits, dairy products and olive oil), and protecting the EU’s 344 Geographical Indications, high-value traditional food and beverage products, against unfair competition and imitation.
The EU announced that all precautions have been taken to protect sensitive agri-food sectors. This is guaranteed by tariff quotas that limit market access for sensitive products imported from Mercosur, but also by a mechanism to protect sensitive European products in case of increased imports from Mercosur countries and by reinforced controls that prevent the entry of non-compliant products into the EU market.
The EU will have the Unity Safety Net, starting in 2028. This is a €6.3 billion fund, providing additional protection for EU farmers in case of market disruptions.
The safeguards are bilateral, not just for Europeans. The EU and Mercosur grant the right to intervene if a large imbalance in prices or volumes occurs.
The signed agreement is based on the Paris Agreement as an essential element to ensure sustainable development, the economic empowerment of women and labor rights, climate neutrality by 2050, and a trade sector suited to the green transition.
The entry into force of the agreement is not automatic; procedures are underway on both sides of the Atlantic. Brazil is one of the countries that expects to begin implementing it in the second half of 2026.
