EU-MERCOSUR TRADE AGREEMENT
A groundbreaking partnership
At a time of increasing geopolitical uncertainty, the EU-Mercosur Trade Agreement represents a golden opportunity to bolster Europe’s competitiveness. Given that Mercosur is already the EU’s second-largest trading partner in goods, enhancing this relationship would be a game-changer for the EU’s competitiveness and resilience. Now is the time to get it over the line.
After 25 years of negotiations, on 6 December 2024, the European Union and Mercosur (Argentina, Brazil, Paraguay, and Uruguay) countries reached a political agreement for a ground-breaking partnership agreement. The proposed agreement includes a political and cooperation pillar and a trade pillar.
Key advantages
Diversification to mitigate geopolitical risks
In the current global context, the EU must continue to develop an ambitious trade and investment diversification strategy to build resilience and mitigate risks. The Mercosur agreement will create a new market of over 750 million consumers – nearly 10% of the world’s population – and will encompass nearly 20% of the global GDP. The deal will facilitate strategic cooperation in many areas, ranging from climate change to economic security.
Boosted competitiveness through enhanced market access for goods and services
The agreement will open new and meaningful trade and investment opportunities, removing tariffs on over 91% of EU goods. With the progressive elimination of Mercosur tariff peaks of 35% for many sectors, European businesses will save over €4 billion annually. This will expand their access to Mercosur markets, which represent a combined GDP of €2.2 trillion. It will also open more opportunities to access services and public procurement markets.
Predictable access to critical raw materials.
This will strengthen the EU’s position in global supply chains and boost its resilience to future disruptions. Businesses will benefit from stable, predictable access to critical raw materials indispensable for the green and digital transitions, and of which Mercosur countries are major producers.
Lower costs through regulatory and standards alignment
The agreement streamlines customs procedures and aligns technical standards between the EU and Mercosur, making it easier for businesses to navigate markets without compromising quality or safety. This reduces barriers and lowers costs for exporters.
Dedicated support for SMEs
The deal includes a dedicated chapter and provides SMEs with improved market access, simplified compliance processes, and tailored support, helping them compete more effectively in both regions. It also includes access to critical information and tools to ease market entry.
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