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17m ago

EU and Mercosur Set to Sign Sweeping Trade Deal in Asunción

A European Parliament decision next week on a court review could freeze ratification for up to 18 months.

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Chatenay-Malabry (France), 15/01/2026.- A cow model painted in the colours of the French national flag with the words 'Fair trade milk' is displayed during a protest by farmers from agriculture and dairy industry unions against the EU-Mercosur deal, outside Lidl's headquarters in Chatenay-Malabry suburb, southwest of Paris, 15 January 2026. France's second-largest agricultural union, Coordination Rurale (CR), along with the APLI and the European Milk Board (EMB), has called for demonstrations to defend the farming profession, and to protest the influx of non-compliant imports replacing French products following the EU's approval of the Mercosur trade deal on 09 January 2026. Despite fierce opposition from the farming sector, the deal, which creates the world's largest free trade zone, is scheduled for official signing on 17 January 2026, in Asuncion, Paraguay. (Protestas, Francia) EFE/EPA/MOHAMMED BADRA
Javier Milei, en la Sesión Plenaria de la Cúpula de Jefes de Estado de los Estados Partes de Mercosur y de los Estados Asociados en Foz de Iguazú (Brasil). Foto: EFE.
La presidenta de la Comisión Europea, Ursula von der Leyen, junto al presidente de Brasil, Luiz Inacio Lula da Silva, en Río de Janeiro

Overview

  • Leaders gather in Paraguay for the formal signing, with European Commission president Ursula von der Leyen attending and Brazil’s Luiz Inácio Lula da Silva absent after meeting EU chiefs in Rio.
  • The pact would create the largest free‑trade area by population, covering roughly 700–780 million people and targeting the removal or reduction of tariffs on about 90–92% of bilateral trade.
  • Sensitive farm goods face phased openings and quotas, including beef, poultry, sugar and ethanol, with safeguard options to address price shocks and unchanged EU sanitary and environmental rules.
  • The agreement still requires approval by the European Parliament and multiple national legislatures, and an EP vote on January 21 to seek a CJEU legality review would pause parliamentary ratification for an estimated 12–18 months.
  • Farmer protests in France, Ireland, Poland and other countries continue, as environmental groups warn of weak enforcement on deforestation, while analysts see bigger gains for European industry and services and expanded opportunities for Mercosur agro‑exports.