Diplomatic negotiations for the signing of the trade agreement between the economic blocs of the Southern Common Market (Mercosur) and the European Union officially began in 1999, representing an agreement with a long history of negotiations toward its regulation. The greatest economic potential of the agreement lies in the creation of the largest free trade area on the planet, comprising an interconnection of markets among a total of 31 countries through a single treaty. Despite this strong potential for economic growth and expansion for both blocs, there are internal political obstacles within European countries that have hindered the negotiation and signing process.
In this context, agribusiness represents a sensitive point for the consolidation of the agreement due to the strong productive and competitive capacity of the Mercosur countries—especially Brazil and Argentina—while, conversely, the sector in Europe fears this same external competitiveness given the robust structure of Mercosur agribusiness. As a result of this point of tension that agriculture and agribusiness exert over the trade treaty between the two blocs, official negotiations lasted for more than two decades.
During January 2026, representatives of the blocs confirmed the official signing of the agreement; however, the treaty is still undergoing internal debates in the European Parliament so that its actual implementation can be assessed. Thus, the question remains whether this agreement will continue to be merely a future promise for the economic development of Mercosur member countries or whether it will receive approval from the political institutions of the European Union and effectively implement the commitment made between the parties.
In recent years, the agriculture and agribusiness sector in Europe has undergone a series of adaptations to a new regulatory framework that began implementing stricter environmental rules to promote the green transition on the continent—a process of structural change from an economic model based on high levels of pollution to one with greater environmental sustainability and lower carbon emissions—resulting in higher costs for producers. In this context, due to reduced subsidies for the sector, adjustments to new regulatory requirements, and increased production costs, productivity levels have shown downward trends along with a decline in sectoral remuneration. Consequently, protests and demands by farmers and agribusiness actors in the region have erupted, calling for greater appreciation of a sector responsible for supplying the entire bloc.
Internal debates on the continent regarding the signing of the agreement with Mercosur have increased concerns and criticism from the sector about the implementation of the treaty’s provisions, particularly regarding the strong influx of external competition from Mercosur agribusiness. Fearing this competitiveness due to its greater productive capacity and lower prices, local farmers protest by reaffirming the importance of food sovereignty on the continent—a concept referring to the right of peoples and societies to choose their own agricultural and production policies, emphasizing the defense of local production over a globalized food regime. Thus, these protests and challenges represent not only political obstacles to the realization of the trade agreement with Mercosur, but also reflect internal pressures within the bloc that are not favoring the sector in the region.
On the other hand, for Mercosur countries, agribusiness represents the greatest expectation for growth and expansion into new markets where they hold comparatively favorable competitive advantages. Furthermore, the agreement also represents a possible reduction in the region’s economic and trade dependence on the United States and China, thereby enabling a new dimension of commercial opportunities for new markets and the expansion of diplomatic partnerships. In this context, Brazil stands out as one of the countries with the greatest commercial advantages under the treaty, as studies by the Institute for Applied Economic Research (IPEA) validate forecasts and expectations for the export sectors of pork and beef, vegetable oils, fruits, grains, and the expansion of the national footwear market.
Moreover, regarding expectations for Brazil’s economic growth and development through the fulfillment of commitments established in the agreement between the blocs, projections indicate an increase of 0.34% in national Gross Domestic Product (GDP) by 2044, a 0.76% increase in foreign investment in the country, and a 2.65% increase in exports of national products to the European continent (Ministry of Foreign Affairs, 2026). Additionally, a positive shift in Brazilian economic development is also evident, with a projected 0.42% increase in real wages—representing nominal wages adjusted for inflation—as well as a 0.56% decrease in consumer price levels (Ministry of Foreign Affairs, 2026), thereby reinforcing the potential the agreement holds for Brazil’s commercial and economic context.
Given this scenario, the agreement aims to promote a trade area with the elimination and reduction of tariffs and customs barriers in the trade of goods and services, facilitating trade flows within this geographic space and strengthening diplomatic ties between the two blocs. In this context, nearly 90% of customs tariffs on trade between the respective economic blocs would be eliminated through a gradual transition over 4 to 10 years to smooth the process of trade liberalization between the parties. Furthermore, due to strong internal European political pressures—particularly from France, where approximately 70% of domestic food production comes from family farming—the agreement includes safeguard approvals for certain European sectors. In this sense, safeguard agreements refer to temporary trade protection measures implemented by a country to protect domestic industries from a massive influx of imported products through tariffs or import quotas.
Thus, the agreement remains under discussion in the European Parliament due to political obstacles involving the agriculture and agribusiness sectors in the region, which fear structural disruption due to strong external competitiveness from Mercosur. This represents a point of tension on the continent regarding the approval and implementation of the diplomatic commitments made between the respective economic blocs. For Mercosur, the agreement represents not only potential economic growth, but above all a reinforcement of the bloc’s process of commercial integration into the international economy, while also promoting an integration between trade and sustainable development.
However, despite these developmental potentials for the Mercosur region, the obstacles in the European Parliament reinforce the historical promise of an agreement that has yet to be implemented. Thus, Mercosur countries persist in uncertainty and anticipation regarding its approval within the political structure of the European Union so that this promise of economic growth may be fulfilled.
References:
Ministério das Relações Exteriores. FACTSHEET Acordo de Parceria Mercosul-União Europeia. 2026. Disponível em: https://www.gov.br/mre/pt-br/assuntos/politica-externa-comercial-e-economica/agenda-de-negociacoes-externas/factsheet-acordo-de-parceria-mercosul-uniao-europeia. Acesso em: 29/01 de 2026.
INSTITUTO DE PESQUISA ECONÔMICA APLICADA. Ipea. Acordo de livre comércio entre Mercosul e União Europeia traria benefícios econômicos para o Brasil. 2024. Disponível em: https://www.ipea.gov.br/portal/categorias/45-todas-as-noticias/noticias/14875-acordo-de-livre-comercio-entre-mercosul-e-uniao-europeia-traria-beneficios-economicos-para-o-brasil. Acesso em: 29 jan. 2026.
Os Ganhos do Agro com o Acordo Mercosul-União Europeia. São Paulo: CNN Brasil, 2026. (28 min.), son., color. Disponível em: https://www.youtube.com/watch?v=zgf4dj1iDCs. Acesso em: 29 jan. 2026.
