Jan 9, 2026, 12:28 p.mJanuary 9, 2026, 12:30 p.m
That’s what happened
The path is clear for the conclusion of the EU free trade agreement with the four South American Mercosur states Brazil, Argentina, Uruguay and Paraguay.
At a meeting of representatives of the 27 EU countries in Brussels, a sufficient number of participants agreed to the planned signing of the deal, as the German Press Agency learned from diplomats.
The agreement has been negotiated since 1999 and caused criticism.Image: keystone
According to the EU Commission, the new free trade zone with more than 700 million inhabitants will be the largest of its kind in the world. The agreement on the controversial agreement was made possible by further concessions to the agricultural lobby. This sees competition from the Mercosur states as a threat to the existence of European agriculture. In South America, agricultural products such as beef can be produced more cheaply than in Europe.
The agreement was actually supposed to have been signed in Brazil shortly before Christmas. However, the necessary majority in the Council of EU Member States was not yet achieved at that time because Italy tied its approval to further promises of support to European farmers. Italy’s yes was necessary because France and Poland, two other large EU states, reject the agreement in its current form.
That’s what lies behind it
The new free trade zone is also intended to send a signal against US President Donald Trump’s protectionist tariff policy. The plan is to largely reduce tariffs and trade barriers between the EU and the Mercosur states. German industry has been pushing for the agreement to be concluded for years.
The EU Commission estimates that the agreement can increase annual EU exports to South America by up to 39 percent (49 billion euros) – supporting more than 440,000 jobs across Europe. Particularly great opportunities are seen for the automotive industry, mechanical engineering and the pharmaceutical industry. For example, a tariff of 35 percent is currently due on car imports into the Mercosur countries.
These points caused criticism
Negotiations on the Mercosur agreement had already started in 1999. The EU Commission then concluded it in December 2024 despite ongoing criticism from countries such as France. Most recently, the EU’s customs dispute with the USA brought new dynamics to the process. Many countries now want to show that the days of fair trade are not over – Germany in particular is one of them.
Critics of the agreement, however, fear that European farmers could be forced into a merciless price war and that the destruction of the rainforest in South America will be fueled. It also claims that the EU’s strict standards for food safety and animal and plant protection could be undermined.
European farmers protested against the agreementImage: keystone
The EU Commission firmly rejects this and emphasizes that only products that comply with the extensive European regulations are allowed to be imported into the EU.
This is how European farmers are protected
In order to take the wind out of the sails of the ongoing protests by farmers against the planned free trade zone, the European Commission recently developed additional economic security clauses.
In the event of a harmful increase in imports from the Mercosur states or an excessive drop in prices for EU producers, countermeasures should be able to be taken quickly. These would lead to tariff advantages being temporarily suspended again.
Farmers should be protected through measures.Image: keystone
Particularly intensive monitoring is planned for imports of products such as beef, poultry, rice, honey, eggs, garlic, ethanol, citrus fruits and sugar. There should also be a report on the effects of imports from the Mercosur countries Brazil, Argentina, Uruguay and Paraguay at least every six months.
This is how it continues
Bolivia now also belongs to the Mercosur alliance. However, the country still has to adapt rules before it can benefit from the free trade agreement.
The agreement is now to be signed in Paraguay, which currently holds the rotating presidency of the Mercosur confederation. From the EU, EU Commission President Ursula von der Leyen and Council President António Costa want to travel to the South American country.
After the agreement this Friday, a written decision is still needed to sign and conclude the agreement. However, this is considered a formality. (sda/awp/dpa)