EU–Mercosur Trade Deal Signed After 25 Years, Ratification Looms

Overview

• Leaders signed the pact on January 17 in Asunción, with Ursula von der Leyen and António Costa in attendance; Brazil’s Mauro Vieira represented President Luiz Inácio Lula da Silva.
• The agreement phases out tariffs on over 90% of trade, with the EU removing duties on 95% of Mercosur goods within 12 years and Mercosur lifting tariffs on 91% of EU goods within 15 years.
• The text sets import quotas and safeguard tools for sensitive farm goods such as beef, poultry, rice, honey, sugar and ethanol, while keeping strict EU sanitary and phytosanitary standards.
• Binding environmental provisions bar benefits for products linked to illegal deforestation and allow suspension if parties breach the Paris climate accord.
• Next steps include a European Parliament vote and national approvals in Mercosur, potential referral to the EU Court of Justice under consideration on January 21, ongoing farmer protests in several EU countries, and the possibility of provisional application; Brazil’s vice president says entry could begin in the second half of 2026 if approvals advance.