The EU–Mercosur trade agreement is a comprehensive free trade agreement between the European Union and the Mercosur countries (Argentina, Brazil, Paraguay and Uruguay). Its objective is to remove trade barriers such as tariffs and quotas and to promote economic cooperation between the two regions. Once implemented, the agreements will significantly reduce or fully eliminate customs duties on a wide range of products traded cross-border between the EU and the Mercosur countries.
Products expected to benefit from this trade agreement include:
- Agri-food products (wine, spirits, dairy products and olive oil);
- Industrial goods (cars, machinery, textiles and clothing, pharmaceutical products and chemicals).
The European Commission estimates that annual customs duty savings for EU exports to Mercosur will amount to approximately €4 billion once tariff elimination has been fully implemented. The agreement therefore represents one of the largest trade agreements in the world, with potential benefits for various sectors such as agriculture, industry and services.
Timeline and current status
Negotiations began as early as 1999 and, after many years, resulted in a political agreement on 6 December 2024. Subsequently, on 3 September 2025, two legal instruments were drawn up 1) the EU–Mercosur Partnership Agreement (EMPA), and 2) an interim Trade Agreement (iTA). These documents were approved by the Council of the EU on 9 January 2026 and formally signed on 17 January 2026 in Asunción, Paraguay.
Although the signing represents an important milestone, the European Parliament decided on 21 January 2026 to temporarily freeze its approval of the agreement and to refer it to the European Court of Justice for legal review. The Court will now assess whether the trade agreement is compatible with the EU Treaties.
Key developments and points of attention
- Legal review: The European Parliament is seeking clarity on compliance with European environmental standards and sustainable trade conditions, which may delay final ratification.
- Economic opportunities: The agreement opens markets for European exporters through lower tariffs and new investment opportunities in Mercosur countries. Sectors such as agriculture, industry and services may benefit.
- Sustainability: Strict conditions have been included regarding environmental protection, human rights and sustainable development, partly in response to criticism concerning deforestation in Mercosur countries.
- Political dynamics: Despite parliamentary concerns, the European Commission, under the leadership of Ursula von der Leyen, continues to support the agreement as an essential step toward sustainable and open trade.
Customs perspective: key considerations for traders
From a customs perspective, trading partners should in particular take into account:
- Preferential rules of origin;
- The availability and reliability of origin documentation (such as supplier declarations);
- The potential impact of tariff rate quotas, safeguard measures and enhanced customs controls on trade flows;
- Failure to comply with origin or compliance requirements may result in customs authorities recovering unpaid or underpaid customs duties (i.e. refusal of preferential tariff treatment upon import into the EU).
What does this mean for your organisation?
For companies with trade relations between Europe and South America, this agreement offers new opportunities, but also imposes obligations in the areas of compliance, sustainability and regulatory requirements. It is important to closely monitor developments and to seek legal advice where necessary.
More information
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