EU and Mercosur Finalize Historic Free Trade Agreement After 25 Years

The deal, creating the world’s largest free trade zone, faces significant hurdles in ratification amid environmental and agricultural concerns.

The EU and Mercosur, comprising Brazil, Argentina, Uruguay, Paraguay, and Bolivia, have concluded negotiations on a free trade agreement covering 780 million people and nearly 25% of global GDP.
The agreement will eliminate tariffs on 91% of goods traded between the blocs, benefiting industries such as automotive, agriculture, and raw materials while saving EU exporters €4 billion annually.
France, Italy, and other EU nations with strong agricultural sectors oppose the deal, citing threats to farmers and insufficient environmental safeguards, including concerns over Amazon deforestation.
The treaty includes provisions tying compliance to the Paris Climate Agreement, with potential suspension for violations, and allocates €1.8 billion to support environmental commitments in South America.
Ratification remains uncertain, requiring approval from the European Parliament, EU member states, and Mercosur countries, with political and legal challenges likely to delay implementation.