The EU has recently advanced two landmark trade deals that could create the largest trade area it has ever concluded. With a new Free Trade Agreement with a Mercisur bloc and an updated deal with Mexico, Europe is set on shaping its economic and geopolitical strategy in Latin America.
"The agreements with Mercosur and Mexico are milestones," said European Commission president Ursula von der Leyen in a post on X. She stressed that Europe is "doubling down on diversification", strengthening ties with strategic partners and securing new opportunities for EU businesses. According to Commission estimates, the deals could boost EU exports by almost 40 percent, support hundreds of thousands of jobs and increase competitiveness across multiple sectors.
"In a time of growing geopolitical instability, these agreements bind us closer to strategically important partners, providing a shared platform to strengthen mutual trust and tackle shared global challenges, including the modernisation of the rules-based global trading system," a statement from the EU Commission explained.
The EU–Mercosur Free trade agreement
The EU's agreement with Mercosur – Brazil, Argentina, Paraguay and Uruguay – has been under negotiation since 1999. If ratified by EU member states and parliaments, it would remove tariffs on 91 percent of EU exports to the region, opening opportunities for industries such as cars, machinery and pharmaceuticals. In return, Mercosur countries will gain greater access for agricultural exports to the EU.
This agreement will open up the world's biggest trade zone, reaching over 700 million consumers. With a first-mover advantage, the EU benefits from lower tariffs and fewer trade barriers to promote export of European goods as well as importing South American products.
EU export and investment opportunities to Mercosur
This FTA is expected to open up several opportunities for the EU, particularly with tariff reductions and market access. Other key provisions include:
EU exporters will save billions in duties, particularly in industrial goods.
High Mercosur tariffs on EU agri-food products (wine, spirits, chocolate, olive oil) will be cut, allowing exports to rise by an estimated 50 percent.
Sensitive EU farming sectors (beef, poultry, sugar, ethanol) will be subject to quotas and phased reductions rather than full liberalisation.
Expansion to Mexico
Mexico is already the EU's largest trading partner in Latin America, with bilateral trade exceeding €70 billion annually. The updated EU–Mexico trade deal modernises and deepens an existing agreement, making EU goods more competitive in Mexican markets.
Tariff elimination: Remaining duties on EU exports (some as high as 100 percent on agricultural products like cheese, pork, and poultry) will be phased out.
Simplified procedures: Easier customs processes will reduce costs and delays for exporters.
Geographical indications: Nearly 570 European food and drink products will be protected from imitation in Mexico.
Beyond supporting better trade relations, these deals will also focus on protecting human rights, multilateralism and security, as well as reinforcing engagement on sustainable development, crime, migration and gender equality.
These agreements are a strategic move for the EU Commission: supporting diversified trading partners, securing raw materials vital for Europe's green and digital transition and reinforcing the EU's role in shaping a rules-based global trading system.