The EU–Mercosur Trade Agreement: Decades in the making
- Conor Long
- Dec 21, 2025
- 4 min read
The proposed trade agreement between the European Union and the Mercosur bloc has become one of the most protracted negotiations in contemporary international trade. Negotiations initially began in 1999, which did not conclude in principle until twenty years later, in 2019. Since then, however, the deal has not yet been ratified and implemented due to ongoing disputes over its contents. Despite attempts to revive it, opposition within Europe and unresolved concerns about environmental issues have repeatedly delayed progress. The EU–Mercosur agreement therefore represents more than a stalled trade deal: it highlights the growing difficulty of reconciling economic liberalisation in an increasingly fragmented global order.
The core members of Mercosur, established in 1991, are Brazil, Argentina, Uruguay and
Paraguay. Venezuela did join in 2012, but due to democratic backsliding, it was suspended in 2016. Other South American countries such as Peru, Colombia, Chile and Ecuador are associate members, but not full members. Bolivia is also in the process of accession but is not yet a full member. Mercosur was formed with the intention of promoting economic cooperation and regional integration in South America. Collectively, Mercosur countries comprise over 260 million people, with their major export being agricultural goods. Across the Atlantic Ocean, the EU is one of the world’s largest and most successful examples of a supranational economic organisation. The two blocs are already involved in substantial trade with one another; however, the new EU-Mercosur agreement will provide deeper market access and closer trade ties with one another.
The main objective of the deal is to reduce tariffs and non-tariff barriers across many
different trade sectors. For example, the agreement would greatly reduce duties for
European exporters, primarily on commodities such as machinery, chemicals and
automobiles. This in turn would make EU-based industries and businesses more
competitive in South American markets. On the other hand, the deal would provide
Mercosur member states with easier access to the EU market, especially for exporting
agricultural goods like beef, sugar and poultry. Those who support the EU-Mercosur deal suggest that it will strengthen economic links between the two regions and provide mutual benefits through enhanced trade efficiency.
While there is significant support for the deal, mainly Germany and Spain, there are also those who vehemently disagree with it. Within the EU, particularly in states with large agricultural sectors such as Ireland and France, there are those who have expressed their concern over the impact such a deal would have on their economies. Increased agricultural imports from Mercosur states, they argue, would compromise local farmers. Irish Independent TD (MP) Michael Fitzmaurice outlined that “this deal will devastate family farms, hollow out rural communities and undermine food standards right across Europe”. As stated by Fitzmaurice, local farmers are not only concerned about the economic consequences the Mercosur deal will bring, but also about the impact EU regulation already have on them, compared with less regulated South American farmers. European farmers are bound by stricter regulations regarding animal welfare and environmental standards compared to their South American counterparts, which ultimately disadvantages local European farmers by creating an uneven playing field. In response, many European farmers, especially in France, are protesting the deal by blocking roads and bringing tractors to demonstrations. Some are even driving to Brussels in their tractors to join a large EU-wide demonstration against the pact and broader agricultural policies.
It’s not just the farmers who are concerned. Environmental groups have also raised concerns regarding the potential implementation of the pact. At a time when the Amazon rainforest is facing devastating deforestation, activists argue that such a deal will only incentivise further forest loss by encouraging the expansion of agricultural exports to the EU. While successive Brazilian governments have pledged to protect the Amazon, critics remain doubtful. Thus, the EU, traditionally viewed as a global leader in environmental regulation, risks undermining its image as a protector of the environment in order to benefit financially. Ultimately, this highlights how climate policy hinders international trade and economic diplomacy. The EU’s desire to ensure the Mercosur deal remains consistent with its sustainability goals has impeded the implementation of the pact, and greatly complicated negotiations. As a result, it raises the question as to whether such a deal is truly feasible and beneficial for both parties
at all.
There is also a distinct geopolitical aspect to the EU-Mercosur deal; it is not purely
economic. Geoeconomics is becoming an increasingly prominent and powerful tool of
geostrategy. States are relying more heavily on tariffs, sanctions, and trade restrictions,
rather than depending solely on military prowess alone to advance their position in the global order. For the EU, such a pact would re-establish its presence in Latin America, while also reducing its dependence on other global powers, especially when relations with the US have been strained due to tariff disputes. On the other hand, for Mercosur, the situation is similar. A deal with the EU would reduce their dependence on trade with China, which, for the moment, is a dominant economic power in Latin America. Despite the geopolitical importance of the agreement for both regions, great power politics are not a primary concern for small actors such as local farmers and environmental activists, thereby causing domestic resistance against the deal. This ultimately slows the process of implementing the deal and illustrates the limits of geopolitics.
To conclude, there is not one singular issue preventing the EU-Mercosur trade agreement from being signed. Instead, it is a complex matrix of economic, political and environmental issues that prolong the ratification, despite the many benefits gained from both parties. Evidently, the deadlock underscores the complexity of negotiating multilateral agreements in today’s world and highlights the importance of a state’s ability to navigate domestic politics and societal concerns, with the needs of the nation. Whether the deal will be signed in the near future remains to be seen.
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