EU–Mercosur Trade Pact Set for Saturday Signing in Paraguay

Overview

• Lula hosted European Commission President Ursula von der Leyen in Rio to reinforce Brazil’s leadership before the ceremony, and Foreign Minister Mauro Vieira will represent Brazil at the Asunción signing.
• On January 21 the European Parliament will vote on whether to seek a Court opinion, a step urged by 145 MEPs that could stall the process as farmer protests across several EU countries intensify opposition.
• The commercial pillar needs consent from the European Parliament and ratifications by Mercosur national parliaments, while a separate political chapter requires approval across all 27 EU member states.
• Brazil expects domestic approvals in the first half of 2026 and targets entry into force of the commercial provisions in the second half of the year.
• The agreement would phase out tariffs on more than 90% of bilateral trade across a market of roughly 720 million people and $22 trillion, boosting EU industrial exports and opening greater access for Mercosur agriculture, with parallel talks advancing on critical minerals such as lithium, nickel and rare earths.