Unpacking the EU-MERCOSUR Deal : EU's trade ambition, pushbacks and (geo)political realities

The EU‑Mercosur agreement represents a historic milestone between the two regions, and will create the world's biggest free trade zone, covering a market of over 700 million consumers. The deal between the EU and Argentina, Brazil, Paraguay and Uruguay is entering a critical phase. Although provisional implementation is scheduled for 1 May 2026, a key issue remains unresolved: the European Court of Justice has not yet ruled on whether the agreement is fully compatible with EU law.

A qualified majority of 21 EU member states voted in favour of the agreement, but 5 members voted against it (Austria, France, Hungary, Ireland, and Poland) with one abstaining (Belgium). Concerns over agriculture, environmental safeguards and enforcement mechanisms remain highly sensitive. This opposition contrasts with the more limited public controversy surrounding other recent EU trade negotiations with partners such as Indonesia, India or Australia.

Shifting geopolitical dynamics, ranging from U.S. unilateralism to China’s expanding influence in Latin America, raise broader strategic questions about the EU‑Mercosur agreement:

• Can it genuinely support the EU’s de‑risking agenda by diversifying supply chains for critical raw materials?
• And do the strengthened sustainability and anti‑deforestation provisions go far enough to reassure the sectors most exposed to competition? 

This expert panel will examine the economic and geopolitical implications of this historic deal, and assess whether it can deliver on its ambitions despite the fact that the political space for comprehensive trade agreements is narrower now than it has been for many years. 

This event is part of the PSIA-Jacques Delors Institute trade event series.

• Jean Luc Demarty, Former Director-General for External Trade (2011–2019) and for Agriculture (2006–2010) at the European Commission
• Antoine Bouët, Director of CEPII (Centre d’études prospectives et d’informations internationales); PSIA Faculty

Moderated by Elvire Fabry, Director of the 'Trade and Economic Security' programme, Jacques Delors Institute