Mercosur and the EU announce the completion of trade agreement negotiations in Uruguay

MONTEVIDEO -- Uruguayan President Luis Lacalle Pou and European Commission President Ursula von der Leyen confirmed Friday the completion of negotiations for a trade agreement between the Southern Common Market (Mercosur) and the European Union (EU).

During the 65th Summit of Mercosur (Argentina, Brazil, Paraguay and Uruguay) and Associated States, which is being held this Friday in Montevideo, Lacalle Pou said that an agreement of this nature "is not a solution, it is an opportunity."

Exercising the temporary presidency of Mercosur, the Uruguayan president pointed out that the speed of progress will depend on the will of each country, emphasizing that progress must be made with "small, but sure" steps in the same direction.

Lacalle Pou spoke on behalf of the other founding members of the South American bloc: Javier Milei (Argentina), Luiz Inácio Lula da Silva (Brazil) and Santiago Peña (Paraguay).

For her part, Von der Leyen expressed the "success" of the negotiations, calling them an "ambitious" agreement that sends a "clear and forceful message to the world" by demonstrating that democracies can support each other.

"Today is truly a historic milestone, and let me thank the chief negotiators for their dedication and determination," von der Leyen said.

"This agreement is not just an economic opportunity; It is a political necessity. We are partners with shared mentalities and common roots," he added, speaking at Mercosur headquarters.

Mercosur and the European Union had initially reached an agreement in 2019, but it was never ratified and had to be renegotiated.

The agreement still needs to be ratified by the parties involved, including the parliaments of the four founding countries of Mercosur. However, it faces resistance from some European nations, led by France, who fear that the influx of agricultural products from South American countries could negatively affect their own agricultural sectors.

The agreement would create a market of more than 700 million people, making it the largest free trade area in the world.

Mercosur hopes to export more food products such as beef and soybeans, while the European Union aims to increase shipments of cars and machinery.

Uruguayan Foreign Minister Omar Paganini explained that the agreement allows Mercosur countries to eliminate 70 percent of tariffs on exportable products such as industrial oils, fish, fruits, vegetables and infusions.

For Paganini, the trade pact also opens up opportunities for European investments in Mercosur as part of value chains.

Due to challenges in gaining parliamentary approval in the European Union, the agreement has been split into two parts: a three-pillar Association Agreement and an Interim Trade Agreement as the trade pillar.

The trade agreement will be adopted more quickly than the Association Agreement, as it is the exclusive competence of the European Union and only requires its adoption by the EU institutions and its Parliament.

The Association Agreement, on the other hand, is a mixed competition agreement and must be approved not only by the EU institutions, but also by the national and regional parliaments of each Member State.

Close