EU–Mercosur Partnership Agreement

The European Union–Mercosur Partnership Agreement is a signed, but not yet ratified, free trade agreement on which the European Union (EU) and the South American trade bloc Mercosur reached agreement in principle in 2019. The planned deal was announced on 28 June at the 2019 G20 Osaka summit after twenty years of negotiations. Once ratified, both the EU and Mercosur will gradually reduce import duties on 91–92% of exports over a 15-year period, and increase import quotas for various products.

Although agreement has been reached in principle, the final texts have not been ratified and therefore have not entered into force. Once ratified, it will represent the largest trade deal struck by both the EU (449 million inhabitants) and Mercosur (260 million inhabitants), in terms of numbers of citizens involved. The draft trade deal is part of a wider EU Association Agreement between the two blocs. Besides trade, the association agreement also deals with cooperation and political dialogue. Negotiations on these two parts were concluded on 18 June 2020.

Proponents say the agreement will diversify trade, reducing reliance on China and the United States (thus also lessening the impact of tariffs imposed by the second Donald Trump administration). Proponents in the EU also note that the agreement will boost exports in EU industrial goods (including automobiles) and agricultural products, such as cheese and wine. Critics, most notably some in the European agricultural sector, oppose increased free trade in the agricultural sector and call for protectionism for European farmers. Within the EU, France, Italy, Hungary, and Poland have been most opposed to the agreement, while Germany, Spain, and Nordic countries have been highly supportive. To calm the concerns of protectionist farmers, the EU Commission announced it would expand an emergency fund for European farmers affected by market disruptions, and set up legal instruments that would allow farmers to suspend the agreement if they can prove that the agreement harmed them.

On 6 December 2024, an agreement on the free trade deal was announced; the vote was delayed until early 2026 due to a request from Italy which needed more time to assuage its farmers. On 9 January 2026, a qualified majority of EU member states in the Council of the EU gave the green light to the agreement by a vote of 21 to 5, with Austria, France, Hungary, Ireland, and Poland voting against it, and Belgium abstaining. A signing ceremony took place on 17 January in the Central Bank of Paraguay. The agreement still needs to be approved by both EU and Mercosur parliaments. On 21 January 2026, the European Parliament approved a measure by a vote of 334–324 to ask the European Court of Justice to rule on whether the free trade agreement between the EU and Mercosur can be applied before full ratification by all member states and whether its provisions restrict the EU's ability to set environmental and consumer health policies, a move that could delay the deal by two years.