After 26 years of negotiations, the agreement between the EU and Mercosur was finally signed in Asunción. This represents a historic first step, but it is not yet the end of the road: the trade pillar still requires the approval of the European Parliament, and the full implementation of the agreement also depends on ratification by national parliaments. In other words, despite the symbolic and political milestone represented by the signing, significant obstacles remain before the agreement can enter fully into force.
The path towards the agreement was long and tortuous, repeatedly interrupted and on several occasions close to failure. To illustrate the temporal scale of the process, it suffices to recall that a student who wrote their undergraduate thesis on the agreement went on to become a professor, at the peak of their academic career, by the time it was finally signed.
There are strong economic arguments in favour of the EU–Mercosur agreement; however, in the end, paraphrasing the famous phrase attributed to a strategist in Bill Clinton’s election campaign, it was “geopolitics, stupid” that ultimately drove the conclusion of the negotiations and the signing of the agreement. The arguments for and against the agreement had been on the table for a long time, but ultimately it was the presidencies of Donald Trump that acted as its unexpected “midwife”.
The first draft of the agreement was presented, to the surprise of many observers, in June 2019, during Donald Trump’s first presidency. When subsequent negotiations once again stalled for years, following Trump’s re-election, a revised draft was presented in December 2024, which continued to generate reservations in some EU Member States. One may speculate as to the extent to which the Trump administration’s aggressive trade policy ultimately helped to assemble a qualified majority in favour of the agreement in the European Council.
A distinction must be made between the material significance and the symbolic significance of the agreement. Undoubtedly, both sides expect to derive economic benefits from it. However, the symbolic value is at least as important. As the President of the European Commission, Ursula von der Leyen, noted, “the importance of this pact goes far beyond the economy. It is a strategic signal at a time when geopolitical blocs are consolidating and fragmentation is increasing.” And the President of Brazil, Luiz Inácio Lula da Silva, emphasised: “At a time when unilateralism isolates markets and protectionism inhibits global growth, two regions that share democratic values and uphold multilateralism choose a different path. (…) Despite differing views, the blocs found points of convergence, demonstrating that cooperation is far more advantageous and effective than intimidation and conflict.”
With this agreement, both sides would clearly position themselves in opposition to US policy. Unlike Trump, Mercosur and the EU support broad trade liberalisation and the consolidation of their trade relations on a legal basis that provides certainty for businesses and governments. The EU and Mercosur refer to the Paris Agreement, from which Trump has once again withdrawn the United States. By contrast, the EU and Mercosur reaffirm its validity and commit themselves to its implementation.
The agreement between the EU and Mercosur is based on a partnership of equals that takes the concerns of the other partner into account. To conclude the agreement, both sides had to make concessions. First, the EU responded to several concerns raised by Mercosur countries, for example with regard to the liberalisation of public procurement (preserving preference margins for domestic goods and services), the right to apply export duties on critical minerals in order to promote local value added, and the protection of the automotive industry over a longer transition period. These adjustments made it possible to present a revised draft in December 2024. In the final phase, for their part, the Mercosur countries accepted European demands relating to mechanisms to protect the agricultural sector.
The concessions were not easy for either side, but they were guided by a shared determination to reach an agreement. In the final phase, the commitment of Brazilian President Lula da Silva was particularly noteworthy, as was the patience and willingness of the Mercosur countries, which were not discouraged by internal disputes or by repeated postponements of the signing by EU Member States. Moreover, from the Mercosur perspective, it is worth highlighting that, despite marked ideological differences, all governments within the bloc fully support the agreement with the EU.
From a self-critical perspective, it must be acknowledged that not all European governments rose to the occasion. The defence—at times excessively narrow-minded—of legitimate sectoral and national economic interests often overshadowed an understanding of the major geopolitical and geoeconomic changes taking place in the world. This also applies to certain political groups in the European Parliament and to some NGOs that protested against the EU–Mercosur agreement.
The EU remains a relevant actor in international politics, particularly in the economic sphere, but it has lost relative influence and must position itself in an increasingly conflictual geopolitical environment with multiple competitors and adversaries. To do so, the EU needs partners, which implies making compromises in order to win them over. When the EU does not seize or occupy economic and political spaces, other actors do so. In Latin America, these are primarily the United States and China, though increasingly also other Asian countries. For this reason, the EU–Mercosur agreement is of both geoeconomic and geopolitical importance.
References
Ursula von der Leyen, In an Age of Instability, the EU–Mercosur Agreement Strengthens Europe, El País, 17 January 2026. https://elpais.com/opinion/2026-01-17/en-una-epoca-de-inestabilidad-el-acuerdo-ue-mercosur-fortalece-a-europa.html
Luiz Inácio Lula da Silva, The Mercosur–EU Agreement Is Multilateralism’s Response to Isolation, El País, 16 January 2026. https://elpais.com/america/2026-01-16/el-acuerdo-mercosur-ue-es-la-respuesta-del-multilateralismo-al-aislamiento.html
The opinions expressed in this blog are solely those of the authors and do not necessarily reflect the position of the EU-LAC Foundation.