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EU and Mercosur Sign Trade Pact as Parliament Weighs Legal Review

A European Parliament vote next week could send the deal to the EU court, pausing ratification for a year or more.

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.
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El acuerdo del Mercosur con la Unión Europea

Overview

  • Leaders gather in Asunción for the signing hosted by Paraguay, with the EU represented by Ursula von der Leyen and Brazil’s Luiz Inácio Lula da Silva absent as he meets EU chiefs in Rio de Janeiro.
  • The agreement would phase out tariffs on roughly 90% of bilateral trade, with quotas and transition schedules for sensitive farm goods such as beef, poultry, sugar and ethanol.
  • By scale, the pact links markets of about 720 million people and a combined economy exceeding $20 trillion, creating one of the world’s largest trade zones by population.
  • European farm unrest persists in France, Ireland, Poland and other countries, and several governments including France, Austria, Hungary and Ireland remain opposed.
  • Following Council approval, the immediate next step is the January 21 vote on a Court of Justice referral that would halt Parliament’s ratification for an expected 12–18 months.