Mercosur–European Union Agreement Signed After 25 Years, Marking a Turning Point for Latin America
After a quarter-century of complex and often stalled negotiations, Mercosur and the European Union have formally signed a landmark free trade agreement, opening a new chapter in relations between Latin America and Europe. The deal was endorsed following a majority vote by the 27 EU member states and is set to create one of the largest free trade areas in the world.
The signing ceremony brought together three of the four Mercosur presidents: Paraguay’s Santiago Peña, Uruguay’s Yamandú Orsi, and Argentina’s Javier Milei. Brazilian President Luiz Inácio Lula da Silva did not attend the event in Asunción, although European Commission President Ursula von der Leyen visited him in Rio de Janeiro the previous day, underscoring Brazil’s central role in the agreement.
The EU’s decision, adopted in Brussels in early January, represents a decisive breakthrough after 25 years of negotiations between the two regional blocs. For the first time, a clear majority within the European Council backed the agreement, overcoming longstanding resistance from countries concerned about its domestic impact.
For Latin America, and particularly for Mercosur, the agreement is widely seen as a strategic opportunity to deepen access to one of the world’s most sophisticated markets. At the same time, it raises important questions on both sides of the Atlantic. In Europe, agricultural producers fear increased competition from lower-cost South American exports. In Mercosur countries, concerns persist over the influx of European technology, machinery, and industrial goods, and the pressure this could place on local industries, especially in economies that have struggled in recent years, such as Argentina.
Brazil’s absence from the signing ceremony was notable but largely symbolic. Lula had hoped to finalize the agreement before the end of Brazil’s rotating Mercosur presidency in December 2025, driven in part by strong support from Brazil’s agribusiness sector. Although negotiations concluded on December 6, 2024, final approval came just weeks after Brazil handed over the bloc’s presidency to Paraguay.
Despite the breakthrough, the agreement still faces procedural hurdles. It must be ratified by the European Parliament, where approval is expected, though resistance remains strong in some national legislatures. France, Hungary, and Ireland voted against the deal within the European Council, reflecting domestic political pressures, particularly from agricultural sectors.
The agreement’s text recalls that negotiations began in 1999 with the objective of building a comprehensive framework covering political dialogue, cooperation, and trade. Their conclusion in late 2024 marks the end of one of the longest-running trade negotiations in modern history.
For Mercosur and Latin America more broadly, the EU agreement represents more than a trade deal. It signals a renewed effort to diversify international partnerships, attract long-term investment, and strengthen the region’s global economic positioning at a time of growing geopolitical fragmentation.
As the agreement moves toward ratification and implementation, its real impact will depend on how Mercosur countries balance competitiveness, industrial development, and social protections, while leveraging improved access to European markets. What is clear is that, after 25 years, Latin America has secured a long-awaited gateway to Europe that could reshape its economic and strategic outlook for decades to come.
