EU, Mercosur bloc countries in South America finalize landmark partnership agreement

By Tuba Ongun

The EU and Mercosur nations on Friday have reached a landmark agreement to forge a comprehensive partnership aimed at strengthening geopolitical, economic, sustainability and security cooperation.

The deal was finalized by European Commission President Ursula von der Leyen and the leaders of Mercosur member states – Brazilian President Luiz Inacio Lula da Silva, Argentinian President Javier Milei, Paraguayan President Santiago Pena, and Uruguayan President Luis Lacalle Pou.

This is a “win-win agreement” that would bring “important benefits” to consumers and businesses on both sides, von der Leyen said.

"We are focused on fairness and mutual benefit," she said, adding that Mercosur exporters will have to comply strictly with EU standards to access the EU market.

Von der Leyen called the pact "the biggest agreement ever" for the EU, in terms of protecting food and drink products, with over 350 EU products now safeguarded by geographical indications.

The agreement is expected to save EU companies €4 billion ($4.2 billion) annually in export duties, she said.

The EU-Mercosur partnership agreement will enhance trade preferences in strategic sectors like renewable energy technologies and low-carbon fuels, an EU statement said.

Small and medium enterprises will benefit from reduced tariffs and streamlined processes, while strategic raw materials critical for the green transition will flow more efficiently and sustainably between regions.

“It represents a major milestone in fighting climate change with strong, specific and measurable commitments to stop deforestation,” the statement said.

In addition, the EU will allocate €1.8 billion to support the green and digital transition in Mercosur countries as part of its Global Gateway initiative, it added.