The commerce settlement between the EU and the South American group of states Mercosur has been signed. In Asunción, Paraguay, EU Commission President Ursula von der Leyen and EU Council President António Costa signed the doc. After greater than 25 years of negotiations, the settlement is predicted to create one of many world’s largest free commerce zones, with greater than 700 million residents and a complete financial output of $22 trillion.
Next to Paraguays President Santiago Peña, Uruguay’s President Yamandú Orsi, Argentina’s President Javier Milei and Brazilian Foreign Minister Mauro Vieira additionally attended the ceremony.
Agreement is meant to spice up commerce between the EU and Mercosur states
The settlement serves “the well-being of future generations,” von der Leyen wrote on X. “Long live the friendship between our peoples and our continents.” It was a “strong signal to the world,” mentioned von der Leyen in her speech earlier than the signing. The settlement opens up “unimagined possibilities” for the populations of the collaborating states. The settlement is worthwhile for each financial blocs. “We both benefit from this partnership – economically, diplomatically and geopolitically. Our companies will create exports, growth and jobs,” mentioned von der Leyen.
The core of the settlement is the elimination of a giant a part of the mutual tariffs. This is meant to broaden the alternate of products and providers between the 2 financial blocs. The EU expects a rise in European exports to the Mercosur‑Countries by as much as 39 p.c, particularly within the automotive and chemical industries. The Mercosur states have thus far primarily exported agricultural merchandise and uncooked supplies to Europe, whereas the EU primarily provides industrial items.
The new free commerce zone can be seen as an indication in opposition to US President Donald Trump’s protectionist tariff coverage. Shortly earlier than the settlement was signed, Trump introduced new tariffs in opposition to Germany and different European international locations due to the Greenland battle. From February onwards, ten p.c would initially be due for items despatched to the USA, and from June the tariff charge would then rise to 25 p.c if no settlement on Greenland was reached by then, Trump mentioned.
According to the Ifo Institute, the settlement between the EU and Mercosur can no less than partially compensate for the losses from US tariff coverage. “The signing of the trade agreement between the EU and the Mercosur countries is an important first step,” mentioned the pinnacle of the Ifo Center for Foreign Trade, Lisandra Flach. “However, additional trade agreements with other trading partners are necessary to compensate for the negative consequences of US tariff policy.”
More than 25 years of negotiations
The Mercosur settlement is the results of greater than 25 years of negotiations between the EU and the South American international locations of Brazil, Argentina, Paraguay and Uruguay. The majority of EU member states just lately permitted the treaty, though France and Ireland voted in opposition to it. To convey negotiations to a conclusion, the EU break up the treaty into two elements: a political partnership settlement and an interim commerce settlement.
After the commerce settlement has been signed, the EU Parliament should now vote on it. Since the EU is solely liable for this half, ratification by nationwide parliaments isn’t needed. The political partnership settlement, in flip, will solely come into drive as soon as it has been ratified by the EU member states and the collaborating Mercosur international locations.
The negotiations had been lengthy characterised by political reservations. France and Poland just lately rejected the settlement due to potential disadvantages for European farmers, whereas Italy linked its approval to additional guarantees of assist. Critics additionally level to potential environmental and competitors dangers, comparable to cheaply produced South American meat or considerations about further deforestation in South America and destructive penalties for indigenous communities.
Most just lately, farmers specifically protested Europa more and more in opposition to the settlement. They concern that farmers in Europe will likely be pressured into a tricky value conflict with the significantly aggressive South American farmers because of the free commerce settlement. Shortly earlier than the settlement, security clauses had been subsequently included into the settlement, in accordance with which countermeasures might be shortly launched within the occasion of a pointy improve in imports from the Mercosur states or an extreme drop in costs.
https://www.zeit.de/politik/ausland/2026-01/eu-mercosur-handelsabkommen-lateinamerika