The European Union and the Mercosur bloc comprising Argentina, Brazil, Paraguay and Uruguay have formally advanced a long-negotiated trade partnership.
The parties reached a political agreement reached in December 2024 and in September 2025. The European Commission proposed the adoption of two parallel legal instruments: the EU-Mercosur Partnership Agreement (EMPA) and an Interim Trade Agreement (iTA), with the latter set to be replaced once the EMPA is fully ratified. The Council authorised the signature of both agreements on January 9, 2026, and they were formally signed on January 17.
The EU is Mercosur’s second-largest goods trading partner, with EUR57 billion (USD66.3 billion) in exports in 2024, and accounts for around a quarter of Mercosur’s services trade. The EU is also the region’s largest foreign investor, with EUR390 billion (USD453.3 billion) in investment stock in 2023.
The agreement aims to boost trade and investment, reduce tariff and non-tariff barriers, strengthen regulatory and legal certainty, while promoting labour rights, environmental protection and sustainable development.
While the deal is unlikely to result in an immediate spike of heavy lift volumes, it should improve the bankability of projects and support more EU-made equipment moves to the region.
