17th of January of 2026 marks a historic milestone for global economic integration. The signing of the Free Trade Agreement between Mercosur and the European Union, after more than 25 years of intense negotiations, strategic diplomacy, and trust-building between two of the world’s largest economic blocs, demonstrates a shared commitment to boosting trade through the reduction of tariff barriers, thereby creating the world’s largest free trade area.
The agreement provides for the gradual reduction or elimination of import and export tariffs on goods and services over the coming years, reaching a market of more than 720 million people. It encourages trade among member countries of both blocs, in which Mercosur countries, on one hand, import manufactured goods incorporating high technological value, while, on the export side, ensure the supply of primary products such as crude oil, coffee, copper and iron ore, pulp, and other commodities.
Negotiations began in 1999 and spanned multiple political and economic cycles in both regions, marked by periods of progress and stalemate that reflected concerns over sanitary and environmental regulations, as well as sensitive productive sectors.
In December 2024, the final text was concluded, resulting in two distinct instruments: the Mercosur–EU Partnership Agreement and the Interim Trade Agreement. In January 2026, the Council of the European Union approved the agreement for formal signature, and today representatives of both blocs formally executed the treaties.
The scale of the commercial relationship between the blocs underscores the importance of strengthening international trade ties. In 2024, bilateral trade in goods between Mercosur and the EU exceeded €111 billion, comprising €56 billion in EU imports from Mercosur and approximately €55.2 billion in EU exports to Mercosur, reflecting a significant increase of over 50% in imports and 25% in exports.
Brazil clearly leads this relationship, accounting for more than 80% of total Mercosur–EU trade volume. In 2024, trade between Brazil and the EU reached approximately €89.5 billion, making Brazil the primary economic engine of Mercosur, followed by Argentina with around €16.4 billion.
Brazil’s main EU trading partners in terms of imports, in approximate values, are Germany (€12 billion), France (€6.5 billion), and Italy (€6.4 billion), with these three countries accounting for more than half of total imports. On the export side, Brazil’s main destinations are the Netherlands (€10.5 billion), Spain (€8.4 billion), Germany (€6 billion), Italy (€5 billion), and Belgium (€4 billion).
These impressive trade figures clearly demonstrate the relevance of the agreement for all countries involved in international commerce.
Outlook and Next Steps
The signed agreement is subject to legislative ratification by the European Parliament and the national legislatures of EU Member States, as well as by the parliaments of the Mercosur countries. Without this step, the treaty cannot formally enter into force.
Implementation will be gradual, providing for progressive tariff reductions under staggered schedules of up to 10 to 15 years to deepen trade liberalization. As a result, its effects will materialize over a longer economic cycle.
Although this next phase will still require a considerable period for full implementation, the most important point is that the first and decisive step has been taken. For Brazil and Mercosur, this development opens access to one of the world’s most important markets and is expected to reduce local production costs due to lower tariff incidence. For the European Union, it strengthens a strategic partnership in the context of a rapidly transforming global economy.
The challenge now lies in transforming this treaty into concrete opportunities for growth, innovation, and sustainable development for all parties involved, while continuing to require political and diplomatic efforts toward a broader and essential reduction of barriers to free trade.
Lawrope has member offices in the various countries covered by the Treaty, allowing importing and exporting companies quick access to the markets of each bloc, offering specialized legal advice for any type of international transaction.
Robertson Emerenciano
Lawyer and Partner at Emerenciano, Baggio & Associados
Chairman of the Board of Directors of Lawrope
