The European Union (UK has reached a free trade agreement with the Mercosur countries, marking a major step in long-running trade talks.
The agreement covers Brazil, Argentina, Paraguay, and Uruguay. It now awaits approval from the European Parliament, which is expected in the coming months.
Following the development, Luiz Inacio Lula da Silva welcomed the deal. He described it as a historic step for multilateral trade and economic cooperation.
Long path to agreement
Negotiations between the EU and Mercosur began more than two decades ago. Progress remained slow due to concerns over farming, environmental standards, and market protection.
However, officials confirmed that South American negotiators completed the final technical steps in Brussels this week. As a result, the EU moved forward with formal approval.
The agreement also comes as global trade faces uncertainty. Several economies continue to adopt protective trade policies, prompting the EU to strengthen partnerships beyond its traditional markets.
Economic gains and farmer concerns
The European Commission described the deal as mutually beneficial. Officials said it would improve market access and reduce costs for businesses on both sides.
The Commission also expects the agreement to save European companies around €4 billion a year in export duties. In addition, it highlighted commitments to prevent deforestation and support climate goals.
However, farmers in countries such as France and Belgium strongly opposed the deal. Protesters warned that cheaper imports could pressure local producers, especially in beef, poultry, and sugar.
Addressing these concerns, Ursula von der Leyen said the Commission included safeguards to protect farmers’ livelihoods. She said the EU listened to concerns and adjusted the agreement accordingly.
Next steps
The deal now moves to the European Parliament for review. If approved, it would become the EU’s largest free trade agreement to date.
Supporters argue the agreement strengthens trade links and economic growth. Critics, however, say its long-term effects on agriculture need close monitoring.
Inputs from Reuters
Last modified: January 11, 2026
