EU-Mercosur Trade Deal Takes Effect, Reshaping Global Trade

The deal creates one of the world’s largest free‑trade zones as Brussels looks to diversify trade beyond the US and China. Make us preferred on Google Share Facebook X (Twitter) LinkedIn Bluesky Email Copy Copied (FILES) European Commission President Ursula von der Leyen arrives for the LXV Mercosur Summit in Montevideo on December 6, 2024. (Photo by Eitan ABRAMOVICH / AFP) Content Share Facebook X (Twitter) LinkedIn Bluesky Email Copy Copied Flip Make us preferred on Google The EU’s trade deal with South American bloc Mercosur provisionally enters into force Friday, despite a pending court ruling on its legality. The agreement to create one of the world’s biggest free-trade zones was sealed in January after more than 25 years of intermittent negotiations, the APF reported. Follow our coverage of the war on the @Kyivpost_official . Mercosur is a trade deal between the European Union and four Mercosur countries: Argentina, Brazil, Paraguay, and Uruguay, which together represent a population of around 295 million and the 5th-largest gross domestic product (GDP) in the world. Negotiations had initially started in 1999 with the first deal signed in 2019, and a political agreement being reached in December 2024. The deal, which eliminates tariffs on more than 90% of trade between the two sides, has proven divisive in Europe , with France leading opposition over concerns some of its farmers will be left worse off. But - backed by a majority of EU countries - Brussels is ahead as it pushes to diversify trade amid challenges from the US and China . “A lot of work went into getting this landmark deal over the line; now it’s time to invest the same effort into making sure our citizens and businesses reap its benefits immediately,” said European Commission chief Ursula von der Leyen. To mark the day, EU chiefs von der Leyen and Antonio Costa will hold online talks with leaders from the Mercosur nations, which include Argentina and Brazil. Other Topics of Interest Is Donald Trump a Russian Asset? In order to answer it, all we need to do is to look at what Trump does; it’s not imperative (though it would be nice) to know why he is doing it. Together, the EU and Mercosur account for 30% of global GDP and more than 700 million consumers. The agreement favours European exports of cars, wine and cheese, while making it easier for South American beef, poultry, sugar, rice, honey and soybeans to enter Europe. The application of the deal comes after the European Parliament referred it to the EU’s top court in January, instead of giving it the green light. France unsuccessfully attempted to block the deal over worries for its farmers, who fear being undercut by cheaper goods from agricultural powerhouse Brazil and its neighbours. Their concern is that producers in Mercosur operate under lower labour, animal-welfare and environmental standards, while EU farmers must comply with extensive and costly regulations, including more restrictions on pesticides. At the same time as it has looked to wrap up the Mercosur deal, the EU has also pushed for other agreements to get closer to other important markets such as India , Australia and Indonesia.