EU and Mercosur Seal Landmark Trade Pact Creating Vast Free-Trade Area

Overview

• Representatives signed the agreement in Asunción, with EU leaders Ursula von der Leyen and António Costa present; Brazil was represented by Foreign Minister Mauro Vieira as President Lula did not attend.
• The deal phases out tariffs on more than 90% of bilateral trade, with most EU cuts in up to 12 years and Mercosur in up to 15 years, linking roughly 720 million people and a combined GDP near US$22 trillion.
• Sensitive agricultural products such as beef, poultry, rice, sugar, honey and ethanol face tariff‑rate quotas and safeguard mechanisms, and binding environmental clauses bar links to illegal deforestation and allow suspension over Paris Agreement violations, with strict EU sanitary rules maintained.
• Ratification now moves to the European Parliament and the national congresses of Mercosur countries, with the trade chapter eligible for provisional application as the broader association agreement faces tougher national approvals.
• Opposition from European farmers persists with new demonstrations planned in Strasbourg, while Brazil’s export agency ApexBrasil estimates the pact could add about US$7 billion to Brazilian exports.