EU-Mercosur trade deal takes provisional effect, boosting hopes and
concerns for millions
[May 01, 2026] By
MAURICIO SAVARESE
SAO PAULO (AP) — The long-awaited trade deal between South American bloc
Mercosur and the European Union took effect Friday, at least
provisionally. The initiative creates a trans-Atlantic market estimated
at $22 trillion with 720 million potential consumers, and some nations
expect to boost their exports by more than 10% by 2038, once it is fully
implemented.
The trade deal was signed Jan. 17 at a meeting of the South American
group. European Commission President Ursula von der Leyen's move to
provisionally enact the deal, effectively sidestepping the EU
Parliament, is being challenged by EU lawmakers at the bloc’s judiciary.
The agreement will be halted if the European body rules against it.
“This is good news for EU businesses of all sizes, good news for our
consumers and good news for our farmers, who will gain valuable new
export opportunities, with full protection for sensitive sectors,” she
said Thursday.
Von der Leyen is expected to hold a videoconference Friday with leaders
of Mercosur nations Brazil, Argentina, Uruguay, and Paraguay to
celebrate the agreement.
Earlier this week, Brazil’s President Luiz Inácio Lula da Silva, one of
the key supporters of the agreement, signed a decree validating the deal
in his country. He said it is a response to unilateral tariffs imposed
last year by U.S. President Donald Trump and a reaffirmation of
multilateralism.
“Nothing better than believing in the exercise of democracy, in
multilateralism, and in cordial relations between nations,” Lula said in
a ceremony in the capital, Brasilia, to celebrate the milestone after
more than 25 years of negotiations.
Last week, Brazil's vice president and one of the negotiators of the
deal, Geraldo Alckmin, said in an interview with The Associated Press
and other news agencies that not striking the deal with the EU would
have meant staying behind while competitor nations made other
agreements.
Brazil is by far Mercosur’s largest economy, with a gross domestic
product estimated at over $2.3 trillion in 2025.
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 Lia Valls, an associate researcher
at the think-tank Fundacao Getulio Vargas based in Rio de Janeiro,
agrees that the deal offers better perspectives against
unilateralism worldwide.
“The EU and Mercosur are showing that it is possible for big blocs
to reach a deal in this world where that multilateral system is
being very weakened and where the U.S. clearly operates to do that,”
Valls told the AP. “It is a very positive sign.”
The agreement faced opposition from European farmers and
environmental groups and was delayed in December, before being
referred to the EU’s top court.
South American agribusiness industries, chiefly beef, fruit and
minerals, are expecting a boost in exports to Europe. European
automakers, pharmaceutical companies and technology firms also look
forward to making new inroads in Mercosur markets.
While companies based in Mercosur countries have expressed fear of
tough competition from European peers in hi-tech industries,
European farmers have shown concerns about price pressures and
imports that do not follow similar environmental standards.
French President Emmanuel Macron, one of the critics of the deal,
has long demanded safeguards to monitor and stop large economic
disruption in the EU, increased regulations in the Mercosur nations
like pesticide restrictions, and more inspections of imports at EU
ports.
The agreement gradually removes trade barriers and tariffs in the
two blocs, but it also keeps economic safeguard clauses for European
countries to protect some sectors from excessive competition, such
as poultry, beef, sugar, and fruit.
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