The EU – Mercosur agreement will create a free trade area of more than 700 million consumers covering 30 % of world GDP. It should enable the EU to export more cars, machinery, wines and spirits, while facilitating the entry into Europe of South American beef, poultry, sugar, rice, honey and soya.
The Mercosur trade agreement between the EU and Argentina, Brazil, Paraguay and Uruguay has been signed after 25 years of negotiations on January 17th 2026, but the EU parliament referred it to the European court of Justice on 21 January for verification. This will take about two years. But the commission can start the application before, and Argentina and Uruguay have already ratified the agreement and will also start to apply it.
For North Macedonia, whose exports and production chains are tightly tied to German and broader EU automotive and machinery manufacturing, higher EU exports to Mercosur should translate into faster industrial growth, more orders for its component producers, and a measurable boost to GDP and employment over the medium term.
The EU–Mercosur agreement is expected to become the EU’s largest trade deal in terms of tariff reduction, cutting over 90 % of customs duties and potentially raising EU exports to Mercosur by around 39 – 40 % by 2040, with particularly strong gains in automotive and machinery sectors. Mercosur will dismantle tariffs on about 90 % of EU imports over transition periods of up to 15 years, while the EU liberalises roughly 93 % of imports from Mercosur within 10 years. EU exports to Mercosur could increase by nearly 40 %, adding about €48.7 billion in extra annual exports and roughly €77.6 billion in additional EU GDP by 2040. In 2024, EU exports to Mercosur were about €57 billion.
The agreement strengthens the EU’s position vis‑à‑vis competitors such as China. It deepens access to government procurement, services and critical raw materials (e.g., lithium, copper), relevant for batteries, e‑mobility and green technologies. The deal goes beyond tariffs, with chapters on sustainability, intellectual property, public procurement, and technical and SPS standards, which reduce non‑tariff barriers and provide more predictable rules for investors.
Mercosur currently applies tariffs of up to 35 % on imported passenger cars and up to 18 % on parts; these will be gradually eliminated under the agreement. Estimates suggest that EU automotive exports to Mercosur could increase by around 200 % (i.e., triple) by 2040, implying a threefold rise in export volumes relative to pre‑agreement levels.
The agreement is criticized by many groups who fear competition. The EU informed that there are quotas eg. for meat (99 000 tonnes at 7,5 % tariff, “one steak per person and year”) and that the EU standards still apply.
Leave a Reply