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After more than two decades of negotiations, the European Commission has validated a trade agreement with Mercosur, the South American trade bloc. The text now moves to individual EU member countries for ratification, a process expected to take months and potentially face opposition.
The agreement aims to reduce the European Union’s reliance on the United States following the imposition of commercial tariffs by washington, while bolstering its presence in a region increasingly influenced by China. For Brazil, Mercosur’s largest economy, the deal represents a significant economic prospect, with President Lula da Silva a vocal supporter as taking office in 2023. The Institute of Applied Economic Research (Ipea) projects that Brazilian agricultural exports to the EU could increase by $7.1 billion between 2024 and 2040 as a result of the agreement.
The EU has also signaled renewed interest in trade agreements with India, Indonesia, and Thailand, and is expected to announce details of a deal with Mexico on Wednesday. The mercosur pact is intended to counter China’s growing role as a major industrial supplier and commodity buyer in South America.
