EU-Mercosur Trade Agreement Enters into Provisional Effect
Al Jazeera English
After 25 years of talks, the EU-Mercosur free trade agreement provisionally took effect on January 17, creating a bloc of 720 million consumers and a combined $22 trillion economy. The deal eliminates tariffs on over 90% of bilateral trade, benefiting EU exports like cars and wine, and South American goods like beef and soy. However, legal challenges and protests from European farmers remain obstacles.
After 25 years of negotiations, the trade agreement between the European Union (EU) and the Mercosur bloc – comprising Brazil, Argentina, Uruguay, and Paraguay – officially entered provisional effect on January 17. The deal opens a free trade zone with a combined population of 720 million and an estimated total value of $22 trillion.
Under the framework, the agreement aims to reduce tariffs and boost bilateral goods exchange. Specifically, tariffs will be eliminated on over 90% of bilateral trade volumes. Key EU exports such as cars, wine, and cheese stand to benefit, while South American beef, poultry, sugar, rice, honey, and soybeans will gain easier access to European markets.
European Commission President Ursula von der Leyen remarked: 'This is good news for EU businesses of all sizes, for consumers, and for farmers, who will have new export opportunities with full protection for sensitive sectors.' She is expected to hold a virtual meeting with Mercosur leaders on January 17 to mark the agreement.
However, the pact is only provisionally in force as it faces a challenge before the European Court of Justice. Plaintiffs argue that the European Commission President bypassed the European Parliament to implement the deal provisionally. If the court rules unfavorably, the agreement could be suspended.
Brazilian President Luiz Inacio Lula da Silva, a key proponent of the deal, signed a decree ratifying the agreement in his country. He framed it as a response to unilateral tariffs imposed by U.S. President Donald Trump last year, reaffirming multilateralism: 'Nothing is better than trusting in democratic practice, multilateralism, and cordial relations among nations.'
The deal has drawn opposition from farmers and environmental groups in Europe. Thousands of Irish farmers staged protests in January 2026, accusing EU leaders of sacrificing their interests. Businesses in Mercosur countries also worry about intense competition from European partners in high-tech sectors.
