EU and Mercosur Sign Trade Pact Creating the World’s Largest Free‑Trade Zone

Overview

• The pact phases out most tariffs: the EU removes duties on about 95% of Mercosur goods within up to 12 years and Mercosur eliminates tariffs on roughly 91% of EU goods within up to 15 years, with quotas for sensitive farm products.
• The agreement now moves to the European Parliament and to the national congresses of Brazil, Argentina, Paraguay and Uruguay, with some provisions eligible for provisional application if approvals progress.
• Several EU states opposed or abstained during the Commission’s sign‑off, including France, Poland, Austria, Ireland and Hungary, reflecting agricultural concerns and farmer protests.
• The text includes binding environmental obligations linked to the Paris Agreement, allows suspension for violations, and keeps strict EU sanitary and phytosanitary rules in place.
• Brazil sits at the center of the bloc’s trade with Europe, and studies project measurable gains for its economy, while Brussels and Brasília also pursue a separate framework for joint investment in strategic minerals such as lithium, nickel and rare earths.