EU and Mercosur: provisional trade agreement from 1 May 2026
The European Commission has confirmed that the provisional trade agreement between the European Union and the four founding countries of the Mercosur South American common market will take effect from 1 May 2026. Its aim is to create a partnership that will bring economic opportunities while taking into account sustainable development.
The agreement applies to the Mercosur countries that have completed the ratification process – Argentina, Brazil, Uruguay and Paraguay. The result is one of the world’s largest free trade areas, covering a market of more than 700 million consumers. For businesses on both sides of the Atlantic, this means gradual elimination of tariffs and easier access to new markets, stronger supply chains and more predictable conditions for investment. EU exporters, in particular, will gain a better platform for placing their products and services in South America. Likewise, South American exporters will find it easier to enter the EU single market.
However, the agreement is not without controversy. Strong criticism is voiced particularly by European farmers, who fear competitive pressure from cheaper imports from Latin America and a potential deterioration of their economic situation. In addition, in January the European Parliament approved a proposal for the Court of Justice of the EU to review the trade agreement. Until the Court issues its decision, full ratification cannot proceed. If the Court were to conclude that certain parts of the agreement are not compatible with EU law, the text would need to be amended. On 24 April, the European Commission published updated guidance on the agreement on its website.
The agreement is not only about reducing tariffs: it also places emphasis on cooperation in labour rights, environmental and climate commitments, as well as securing strategic raw materials. It also includes safeguard mechanisms for sensitive sectors of the European economy to mitigate potential adverse impacts on selected industries, especially agriculture and the food sector.
For companies in Mercosur and the EU, the agreement also brings new obligations – in particular relating to tax and customs rules, VAT, Intrastat, local social, tax and environmental regulations, and the posting of workers to individual member states. Companies wishing to seize the new opportunities should prepare in good time for increased compliance demands and for the management of cross-border logistics, and should take into account that the legal and political framework of the agreement may evolve further depending on the outcome of judicial review at EU level.