After 25 years of negotiations, on 6 December 2024 the European Union (EU) and the founding countries of MERCOSUR (Argentina, Brazil, Paraguay and Uruguay) reached a political agreement on an Association Treaty, marking a turning point in their trade and political relations. This agreement, considered the EU’s most ambitious, will create the world’s largest free trade area and open up a market of 750 million consumers.

The treaty seeks to progressively eliminate most tariffs on European exports to MERCOSUR, generating estimated savings of more than 4 billion euros per year for European companies. Sectors such as agri-food, automotive, pharmaceuticals and machinery will be the main beneficiaries, which currently face tariffs of up to 35%. It will also protect 350 European products with designation of origin, strengthening their position against imitations in MERCOSUR.

For its part, the South American bloc will have limited and controlled access to sensitive EU markets, such as beef and chicken, under strict quotas and safeguards designed to protect European farmers.

The agreement also represents a significant commitment to sustainable development. It includes specific measures to combat deforestation, preserve natural resources and meet the objectives of the Paris Agreement on climate change. As part of this initiative, the EU will invest €1.8 billion in Mercosur countries through its Global Gateway programme, supporting a green and digital just transition. This effort seeks to balance economic growth with environmental protection by promoting sustainable investments and the development of green infrastructure.

For more information on this agreement and the commercial opportunities it offers, please click on the following link to read the full article.

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