The European Union and Mercosur (Brazil, Argentina, Uruguay, Paraguay) reached a political agreement on a free trade deal in June 2019 after two decades of negotiations. The pact aims to reduce tariffs and increase trade, but critics argue it could undermine European agricultural standards and environmental protections.
Under the agreement, the EU would eliminate tariffs on 91% of goods imported from Mercosur, while Mercosur would remove tariffs on 91% of EU exports. Key concerns include increased imports of beef, poultry, and sugar, which European farmers fear could undercut local production. Environmental groups warn that the deal might incentivize deforestation in the Amazon, as Brazil expands agricultural land.
As of June 2026, the agreement has not been ratified by all EU member states. France and Ireland have expressed strong opposition, citing climate and farming concerns. The European Commission has proposed an additional sustainability clause to address deforestation, but negotiations remain stalled.
Proponents, including Germany and Spain, argue the deal would boost EU exports in machinery, cars, and chemicals, and strengthen geopolitical ties with South America. The EU is Mercosur's largest trade and investment partner, with bilateral trade in goods worth €88 billion in 2023.
