After more than 25 years of negotiations, the Council of the European Union has approved moving forward with the long-awaited free trade agreement with the Southern Common Market (Mercosur), paving the way for what could become one of the largest free trade areas in the world.

The decision was adopted by a majority of the 27 EU member states, despite opposition from countries including France, Poland, Ireland, Austria and Hungary, and an abstention by Belgium. Support from key economies such as Germany, Spain and Italy proved decisive in securing approval at this stage.

With the Council’s endorsement, European Commission President Ursula von der Leyen is expected to travel to Asunción, Paraguay, where the agreement is scheduled to be formally signed on January 17. Paraguay will host the ceremony in its role as Mercosur’s rotating presidency.

A historic agreement with global impact

The EU–Mercosur agreement, involving Argentina, Brazil, Paraguay and Uruguay, aims to create a market of more than 700 million consumers, eliminating tariffs on over 90 percent of goods traded between the two blocs.

From the European perspective, the deal is seen as a strategic move to diversify trade partnerships amid growing geopolitical uncertainty and shifting global trade policies. For Mercosur countries, it represents a major opportunity to gain preferential access to the European market, boosting exports, investment flows and regional value chains.

Internal resistance within Europe

The agreement has faced strong resistance, particularly from France, where political leaders across party lines have criticized the deal as a threat to the country’s powerful agricultural sector. French President Emmanuel Macron has repeatedly warned that the agreement does not provide sufficient safeguards for European farmers.

However, attempts to block the deal ultimately failed, especially after Italy, which had sought a last-minute delay in late 2025, decided to throw its weight behind the agreement.

Parliamentary approval still required

Despite the political breakthrough, the agreement will not enter into force immediately. Following the signing in Asunción, it must still receive approval from the European Parliament, where the outcome remains uncertain.

Around 150 Members of the European Parliament, out of a total of 720, have indicated they may pursue legal action to prevent the agreement’s implementation, signaling a contentious debate in the weeks ahead.

Mercosur countries await final steps

On the South American side, expectations are high. Argentina’s Foreign Minister Pablo Quirno confirmed that the agreement will be signed in Paraguay, describing it as “a historic and the most ambitious agreement ever reached between both blocs.”

While final details of the signing ceremony have not yet been officially announced, diplomatic sources suggest it may take place at ministerial level, with the foreign ministers of the four Mercosur countries acting as signatories.

A turning point in EU–South America relations

If fully ratified, the EU–Mercosur agreement would mark a turning point in relations between Europe and South America, with long-term economic, political and strategic implications. At a time of increasing fragmentation in global trade, the pact seeks to strengthen integration, establish common rules and reinforce transatlantic economic ties between the two regions.