EU and MERCOSUR Reach Long-Awaited Trade Deal

On 5 December 2024, more than 25 years after negotiations began, the European Union (EU) and the Southern Common Market, known as MERCOSUR — consisting of Argentina, Brazil, Paraguay, Bolivia, and suspended member Venezuela — reached an agreement to create a free trade zone covering more than 700 million people and 25% of global gross domestic product (GDP), making it one of the largest free trade zones in the world.

MERCOSUR currently imposes high tariffs on imported goods, including 35% on cars, clothing, and leather shoes; 14% for pharmaceuticals; and up to 18% on chemicals. The new agreement will remove tariffs on 91% of goods exported from the EU to Mercosur.

“For Europeans, it opens up a vast region to freely trade with, including access to critical raw materials, and diminishes the risk of competitors replacing us in our absence,” said High Representative for Foreign Affairs and Security Policy/Vice-President of the European Commission Kaja Kallas. “The deal creates a market for over 700 million people and saves businesses in Europe billions in EUR annually in tariffs. For both sides, it will lead to many more jobs and opportunities. This is good foreign policy and a good day for the EU and our partners in Latin America.”