The European Commission has recently launched the ratification process for the free trade agreement reached in December 2024 with Argentina, Brazil, Paraguay and Uruguay, entering the final phase before definitive approval.
In light of doubts surrounding the recently concluded EU–US arrangement, the EU–Mercosur deal has gained particular prominence for Europe and is seen as essential to advancing European Strategic Autonomy.
Beyond its role as a priority in the EU’s trade strategy, the agreement represents a clear European commitment to free trade and to using trade policy as a bridge to like-minded regions built on shared values.
The EU–Mercosur agreement will progressively remove tariffs on most products, with only certain agricultural goods subject to special contingencies.
Once ratified, it would create a common market of around 780 million people—the world’s largest free-trade area. The latest provisions address concerns from groups such as farmers about potential unfair competition from Mercosur producers.
Environmental clauses are also included, with the aim of establishing genuine environmental and social standards rather than mere export requirements.
Separating pillars to accelerate implementation
On 3 September, the Commission adopted draft Council Decisions on the signature and conclusion of two parallel legal instruments: the EU–Mercosur Partnership Agreement (EMPA) and the Interim Trade Agreement (iTA).
In time, the iTA will be repealed and replaced by the EMPA once it is fully ratified and enters into force. This marks a significant step, reflecting the Commission’s intention to separate the trade pillar—an exclusive EU competence—from the political and cooperation pillars. This would allow the agreement to enter into force following approval by the Council and the European Parliament, without requiring ratification by national parliaments.
From a business perspective, strengthening institutions, anti-corruption mechanisms and administrative capacity in partner countries is as important as tariff reductions or market size. Legal certainty, effective arbitration mechanisms to protect investments, judicial cooperation programmes and the digitalisation of administrative processes are indispensable.
Today’s geostrategic context demands reliable partners
Global trade has experienced a turbulent period, prompting European countries to diversify their economic and commercial ties.
In this context, Mercosur has renewed relevance. The effects of the war in Ukraine, combined with the tariff policy of the Trump administration, have reshaped the international landscape, adding pressure on both blocs to move forward and finalise the agreement concluded in Montevideo in December 2024.
Beyond market access, for Europe the deal means a broader diversification of suppliers and, consequently, greater resilience of global value chains.
The EU also sees Mercosur as a reliable partner in reducing dependency on China for mining, critical raw materials and rare earths—key to the energy transition and industrial transformation. The agreement will ensure most of these materials are not subject to export taxes.
The Commission is building consensus for a common European position
The agreement must now be signed by EU Member States, most of whom support it, eager to offset the deterioration of trade relations with the United States.
For a time, France—backed by Poland, the Netherlands, Austria and potentially Italy—could have formed a blocking minority in the Council. However, after months of negotiations on a tariff arrangement with the US, the balance appears to have shifted. As within Mercosur, conditions among EU Member States now seem more favourable.
Attention has turned to a possible signature at the next Mercosur half-yearly summit in Brasília in December 2025.
The timing reflects a rare consensus among all Mercosur countries. Notably, President Lula da Silva has driven momentum, holding direct talks with Emmanuel Macron, Spain’s Prime Minister Pedro Sánchez, and the EU High Representative for Foreign Affairs and Security Policy during her visit to Brasília; Kaja Kallas affirmed the EU’s political will to conclude the agreement.
Another delay or failure to sign would carry significant consequences for the credibility and future of integration on both sides.
For Mercosur, the repercussions could be severe, potentially triggering a new crisis with unpredictable outcomes. For the EU, it is time to demonstrate the political will to deliver, signalling unity and a single European voice.
If Europe is serious about strategic autonomy, the moment is now.
