Asunción, Paraguay | 17 January 2026
The European Union and the Mercosur trade bloc signed a landmark Partnership Agreement on 17 January 2026, concluding over 25 years of negotiation. The signing ceremony was held in Asunción, Paraguay.
The deal is designed to create one of the world’s largest free trade areas, covering approximately 700 million consumers across 31 countries. It aims to deepen trade and economic cooperation by progressively eliminating tariffs on 91–92% of goods over a 15-year period and reducing other trade barriers.
The agreement extends beyond tariffs, covering services, investment, public procurement, intellectual property rights, and sustainable development. It includes legal guarantees for hundreds of European food and drink products from imitation and seeks to strengthen workers’ rights and environmental protections.
For the full agreement to enter into force, it must be ratified by the European Parliament and all 27 EU member states, as well as by the national parliaments of the four Mercosur founding states: Argentina, Brazil, Paraguay, and Uruguay. A major development occurred on 21 January 2026, when the European Parliament passed a resolution to request an opinion from the Court of Justice of the European Union on the agreement’s compatibility with EU law, a step that could delay final EU ratification.
Despite this, the parties may provisionally apply most of the trade measures pending the court’s opinion, potentially as early as March 2026, if at least one Mercosur state agrees.
References:
- European Commission. “The EU-Mercosur trade agreement.” European Commission, https://commission.europa.eu/topics/trade/eu-mercosur-trade-agreement_en.
- Sullivan & Cromwell LLP. “EU Trade Developments: Mercosur and India.” Sullivan & Cromwell, Jan. 2026, https://www.sullcrom.com/insights/memo/2026/January/EU-Strikes-Major-Trade-Deals-Mercosur-India.
- King & Spalding. “European Union Signs EU-Mercosur Free Trade Agreement.” KSLaw, 5 Feb. 2026, https://www.kslaw.com/news-and-insights/european-union-signs-eu-mercosur-free-trade-agreement.
