Mercosur-European Union Agreement: Signing Expected on December 20 in Foz do Iguaçu

1. Signing of the Mercosur-EU Agreement

The Mercosur-European Union Partnership Agreement will be signed on December 20, 2025, in the city of Foz do Iguaçu, during the Summit of Heads of State of Mercosur member countries. Brazil, which holds the rotating presidency of the bloc this semester, will host the ceremony that formalizes the conclusion of a twenty-five-year negotiation process.

The signing takes place after the completion of the legal review and translation of the negotiated texts. The documents, originally drafted in English, have been translated into the twenty-three official languages of the European Union and the official languages of Mercosur, including Portuguese and Spanish.

Two instruments will be formalized on this occasion. The first consists of a preliminary economic and trade agreement, which may enter into force early upon approval by the European Parliament. The second corresponds to the complete Partnership Agreement, encompassing not only the trade pillar but also provisions on political cooperation and institutional dialogue between the blocs.

The Brazilian government considers the signing of the Brazil-EU trade agreement a decisive impetus for deepening bilateral economic relations. The treaty is expected to provide an environment of greater legal certainty for companies and investors, as well as foster new investment flows and cooperation in strategic sectors.

With the formalization scheduled for late December, the parliamentary ratification phase begins. At the European level, the European Parliament must approve the agreement by simple majority. In Brazil, the text will be submitted to the National Congress, following the constitutional procedures applicable to international treaties.

2. Scope and Significance of the Mercosur-EU Trade Agreement

The Mercosur-European Union Partnership Agreement creates the largest bilateral free trade area in the world. Together, the two blocs bring together approximately 718 million inhabitants and a combined Gross Domestic Product of around 22 trillion US dollars. It is simultaneously the largest trade agreement ever negotiated by Mercosur and one of the most comprehensive concluded by the European Union with external partners.

The treaty provides for the elimination of tariffs on more than ninety percent of exports between the blocs. On the European side, the European Union commits to fully eliminating its tariffs on Brazilian industrial products within up to ten years, with approximately eighty percent of reductions occurring upon the agreement’s entry into force. For agricultural products, the EU will grant preferential access to Mercosur in virtually all tariff lines in the sector.

The negotiation process, initiated in 1999, traversed different political and economic contexts over more than two decades. The final stage of negotiations, conducted between 2023 and 2024, resulted in significant adjustments compared to the political agreement preliminarily announced in June 2019. Among the innovations incorporated into the final text are more robust commitments on sustainable development and cooperation mechanisms to support the implementation of the agreement in Mercosur countries.

Following the formal signing, the treaty will proceed to ratification by the parliaments of the parties. The European Parliament must approve the text by a majority of fifty percent plus one vote. In Brazil, ratification will depend on approval by the National Congress, with subsequent promulgation by the Executive Branch. There is no defined deadline for the completion of these stages, although the expectation is that the trade pillar of the agreement may enter into force early.

The entry into force of the Mercosur-Europe free trade agreement will represent a significant signal in favor of trade multilateralism, in a global context marked by increasing protectionism and geopolitical tensions.

3. Opportunities for Brazilian Companies under the Mercosur-EU Agreement

The Mercosur-European Union Partnership Agreement opens significant prospects for Brazilian companies operating or intending to operate in the European market. The progressive elimination of tariff barriers, combined with clearer rules for bilateral trade, tends to expand access to a market with high purchasing power and demanding consumer standards.

A study published by the Institute for Applied Economic Research (IPEA) projects growth of 0.46% in Brazilian GDP between 2024 and 2040, equivalent to approximately US$ 9.3 billion. The same study indicates an increase of 1.49% in investments during the period, as well as a gain of US$ 302.6 million in the trade balance.

The agribusiness sector is among the main beneficiaries, with a projected production increase of 2%, corresponding to US$ 10.9 billion. The European Union is currently the second largest import market for Brazilian agricultural products, behind only China. With the agreement, Brazilian exporters will have preferential access for products such as beef, pork and poultry, as well as coffee, sugar, ethanol, fruits and soybeans.

The national industry also finds relevant opportunities. IPEA projects growth of 0.08% in the mineral extraction industry (US$ 126 million) and 0.04% in the manufacturing industry (US$ 498.5 million). Traditional sectors such as footwear, leather and food products are expected to expand their exports to Europe.

From an investment perspective, the agreement establishes an environment of greater legal certainty that tends to boost capital flows between the blocs. The European Union already accounts for almost half of the stock of foreign direct investment in Brazil, and the treaty is expected to strengthen this position.

4. Challenges and Regulatory Compliance Requirements

The trade liberalization provided by the Mercosur-European Union Agreement brings with it significant adaptation requirements for Brazilian companies. The treaty incorporates rigorous commitments on sustainability, environmental compliance and technical standards that will condition effective access to the European market.

In the environmental field, the agreement establishes mechanisms for monitoring practices related to combating illegal deforestation and meeting climate targets. Brazilian exporters must demonstrate compliance with national environmental legislation and adopt transparent business practices, otherwise facing trade restrictions.

European sanitary and phytosanitary standards remain fully applicable. Agricultural products and foodstuffs destined for the European Union market must meet the food safety standards in force in the bloc, which may require investments in certifications, traceability and adaptation of production processes.

The agreement also imposes obligations regarding geographical indications and intellectual property. More than 350 European products will be protected in Mercosur countries, while Brazilian producers must observe restrictions on the use of protected geographical designations.

For Brazilian companies, the scenario demands investments in innovation, quality and regulatory compliance as a condition for fully benefiting from the opportunities created by the treaty.

5. Legal Implications for Commercial Operations

The Mercosur-European Union Partnership Agreement establishes a new regulatory framework for commercial operations between the blocs, with significant legal implications for exporting and importing companies.

Regarding rules of origin, the treaty defines specific criteria for products to benefit from the negotiated tariff preferences. Proof of origin will require adequate documentation and possible certification by competent authorities, which demands attention in the structuring of contracts and supply chains.

The agreement also includes trade defense mechanisms, including bilateral safeguards applicable in the event of import surges that cause damage to domestic industry. Anti-dumping and countervailing measures will follow World Trade Organization disciplines, with additional transparency commitments between the parties.

For dispute resolution, the treaty provides for specific consultation and arbitration procedures, providing greater predictability to trade relations. Disputes involving sustainability commitments will have their own dialogue and cooperation mechanisms.

The complexity of the new regime recommends that Brazilian companies with operations in Europe seek legal advice specialized in international trade. The team at Barbieri Advogados includes professionals registered with the Bar Associations in Germany, Portugal and Ireland, offering direct legal advice in strategic markets for Brazilian companies with operations in Europe.

6. Outlook and Recommendations

The Mercosur-EU Agreement inaugurates a cycle of transformations in trade relations between the blocs. Brazilian companies that anticipate regulatory changes will be better positioned to take advantage of opportunities for access to the European market.

Preparation should include review of export and import contracts, adaptation to European technical and sanitary standards, and structuring of supply chains in compliance with the treaty’s rules of origin. Investments in environmental and quality certifications become relevant competitive differentiators.

The support of legal advice specialized in international trade law will be decisive for the transition to the new regime, ensuring regulatory compliance and risk mitigation in cross-border operations.

7. Frequently Asked Questions about the Mercosur-EU Agreement

What is the Mercosur-European Union Partnership Agreement? It is a trade agreement between Mercosur (Brazil, Argentina, Paraguay and Uruguay) and the European Union that eliminates tariffs, facilitates trade and establishes common rules in areas such as sustainability, intellectual property and investments.

When will the agreement be signed? The signing is expected on December 20, 2025, in Foz do Iguaçu, during the Mercosur Heads of State Summit.

When does the agreement enter into force? After signing, the treaty will proceed to ratification by the European Parliament and the national congresses of member countries. There is no defined deadline for the completion of these stages.

Which sectors will benefit most in Brazil? Agribusiness and traditional industrial sectors, such as footwear, leather and food, are among the main beneficiaries of tariff elimination and preferential access to the European market.

What are the main requirements for Brazilian exporters? Companies must meet European sanitary, phytosanitary and environmental standards, as well as prove the origin of products to benefit from tariff preferences.

Source of economic data: IPEA – Institute for Applied Economic Research, February 2024.

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Equipe de Redação da Barbieri Advogados é responsável pela produção e revisão de conteúdos técnicos, assegurando comunicação clara, precisa e alinhada aos valores institucionais. A Barbieri é inscrita na OAB/RS sob o nº 516.