Agreement is scheduled to be signed on January 17th; President Lula said that the union of the blocs paves the way for one of the largest free trade pacts in the world
When celebrating the approval of the trade agreement between the European Union and Mercosur, the president Luiz Inácio Lula da Silva (PT) was clear in declaring that . The agreement, scheduled to be signed on January 17th, is already classified as the largest in the world, and should favor European industry, while agribusiness should be the main beneficiary on the South American side.
as it strengthens multilateralism and allows trade in cheaper and better quality products. “This is the largest trade agreement negotiated by Mercosur and one of the largest among those agreed by the European Union with commercial partners”, highlights the ministry.
Between January and December 2025, Brazilian exports to the EU alone totaled US$49.8 billion, an increase of 3.2% compared to the previous year, according to data from the Foreign Trade Secretariat. In the same period, imports reached US$50.3 billion, growth of 6.4%.
The main items sold by Brazil to the European bloc were: crude petroleum oil, unroasted coffee, soybean meal, copper ores and soybeans. Medicines led Brazilian purchases. The agreement, which can boost Brazilian exports, especially agriculture and industry, brings some main benefits, such as the elimination of customs tariffs, which will allow:
- Gradual reduction of tariffs on most goods and services;
- Mercosur: will eliminate tariffs on 91% of European goods within 15 years;
- European Union: will eliminate tariffs on 95% of Mercosur goods within 12 years.
And it provides immediate gains for the industry, which will have zero tariffs from the beginning for several industrial products, benefiting sectors such as:
- Machines and equipment;
- Cars and auto parts;
- Chemicals;
- Aircraft and transport equipment
In relation to sensitive agricultural products, they will now have quotas, that is, products such as beef, chicken, rice, honey, sugar and ethanol will have import quotas, if the established limit is exceeded, tariffs will be charged.
It is worth remembering that one of the points of the agreement is that products benefiting from the agreement cannot be linked to illegal deforestation. And if there is any violation of the Paris Agreement, the contract is suspended.
In the European Union, quotas are equivalent to 3% of goods or 5% of the value imported from Brazil. In the opposite scenario, they reach 9% of the goods or 8% of the value.
Despite the endorsement, as well as the signature of the Congress of Brazil, Argentina, Uruguay and Paraguay. South American countries should only sign the agreement after European approval.
