The EU and the South American trade bloc, Mercosur, have signed a long-awaited free trade agreement, concluding 25 years of negotiations and paving the way for what would become the EU's largest trade accord to date.
The deal was signed on January 17 in Paraguay by senior officials from both sides and is designed to lower tariffs, improve market access and boost trade flows between the two regions. Once in force, the agreement will create one of the world's largest free trade areas, covering a combined market of around 700 million consumers.
"We choose fair trade over tariffs, we choose a productive long-term partnership over isolation," said European Commission president Ursula von der Leyen at the ceremony in Asuncion, Paraguay.
Before it can take effect, the agreement must still receive the consent of the European Parliament and be ratified by the national legislatures of Mercosur members Argentina, Brazil, Paraguay and Uruguay.
According to the European Commission, the agreement is expected to deliver substantial economic benefits. EU exports to Mercosur are projected to increase by around 39 percent annually, equivalent to approximately €49 billion, while supporting hundreds of thousands of jobs across the EU. European companies are expected to gain improved access to key Mercosur sectors including manufacturing, chemicals, pharmaceuticals, machinery, food and drink and services.
The deal also includes commitments on rules of origin, customs procedures, trade facilitation, sustainability and regulatory cooperation, reflecting the structure of modern comprehensive trade agreements.
For businesses, the agreement signals major opportunities, but also introduces new compliance and operational considerations, particularly around tariff schedules, preferential treatment and origin requirements once the agreement comes into effect.
What does it mean for MIC?
In anticipation of implementation, MIC's Trade Content Creation Team has already prepared product-specific rules of origin for the EU–Mercosur agreement. These will be made available via MIC’s new Rule of Origin Service (RoO Service) once the deal enters into force.
MIC’s new RoO Service ensures that our customers have timely and accurate trade content to support compliance and preferential trade claims – not only for the EU-Mercosur agreement but all other available FTAs in future.
MIC OCS (Origin Calculation System) is ready to collect supplier declarations directly through the web portal and to perform finished‑product calculations in accordance with the EU–Mercosur rules. This ensures that customers can not only access the necessary trade content but also immediately operationalize it once the agreement enters into force.
As the ratification process is on its way, the EU–Mercosur agreement marks a significant shift in global trade relations and underscores the growing importance of trade diversification at a time of heightened geopolitical and economic uncertainty.
