Mercosur–European Union Trade Agreement Advances and May Facilitate Brazilian Exports

After more than two decades of discussion, the Southern Common Market (Mercosur) and the European Union (EU) signed their long-negotiated trade agreement on January 17, 2026, during a ceremony held in Asunción, Paraguay, which currently holds the rotating presidency of the South American bloc.

The event was attended by the President of the European Commission, Ursula von der Leyen, and the President of the European Council, António Costa. The Argentine President, Javier Milei; the President of Uruguay, Yamandú Orsi; the President of Paraguay, Santiago Peña; and Brazil’s Minister of Foreign Affairs, Mauro Vieira, signed the agreement on behalf of the four full Mercosur member states.

However, the agreement still requires ratification by the parliaments of the European Union member states and the Mercosur countries before it fully enters into force.

According to reporting by the Brazilian news outlet G1, the Brazilian Representation in the Mercosur Parliament approved the agreement, and the text is now set to proceed to the plenary of Brazil’s Chamber of Deputies. 

The outlet also reported that, despite efforts by some European legislators to refer the matter to the Court of Justice of the European Union (CJEU) — a move that could delay implementation by up to two years — diplomats expect provisional application of parts of the agreement as early as March.

When it seemed that negotiations were nearing conclusion, the process faced additional institutional scrutiny in the European Union. A group of Members of the European Parliament supported referring aspects of the agreement to the CJEU for legal review. 

The Court will evaluate whether the pact complies with European Union law, particularly amid concerns about competition from Mercosur agricultural products entering Europe at lower prices, which could affect certain domestic producers. 

As a result, the negotiations that have lasted more than two decades may extend further before full ratification.

The European Union is composed of 27 countries, with a population of approximately 450 million people and a GDP of about USD 22.4 trillion, representing significant business potential. 

An agreement facilitating trade between these two blocs is considered a major step for multilateral trade cooperation at a time of rising protectionist tendencies in parts of the world.

Some products in which Brazil excels are included in the agreement and could benefit specific sectors of the economy. This is the case for fruits, where certain tariffs are expected to be gradually reduced or eliminated. 

Others, such as avocado, lemon, lime, melon, and watermelon, may not be subject to restrictive quotas between the blocs, potentially expanding trade flows.

Vegetables and fruits account for just over three percent of Brazil’s exports to the European Union. Brazilian fruit exports set records for the third consecutive year in 2025. A 12% increase in value reached approximately USD 1.5 billion, while volume grew 19.6% compared to 2024.

Brazil’s fruit cultivation is concentrated in the semi-arid region of the São Francisco Valley, which stands out for its ability to produce year-round, unlike many regions where harvest cycles are seasonal.

This is highlighted by the president of Abrafrutas, the Brazilian Association of Producers and Exporters of Fruits and Derivatives, Guilherme Coelho, in an interview with The Sentinel by Yuvoice:

“The São Francisco Valley is a reference point for irrigated agriculture in Brazil. It’s an impressive sector. What do we have here that neither Europe nor the rest of the world has? The semi-arid climate — a region in the Northeast with very limited rainfall.”

“But we also have the sun and the São Francisco River, which is used for irrigation. With rational water use, such as drip irrigation, only the amount the plant needs is supplied, with minimal waste. That’s why, six months ago, we received an ESG sustainability seal for fruit production. It’s another differentiator for products from the São Francisco Valley.”

Regarding Brazil’s capacity to supply fruit during global off-season periods, Coelho added:

“The semi-arid region, with abundant sun and irrigation, allows us to produce grapes and other fruits year-round. Europe, however, has seasonal gaps in production. In fact, much of the world does.”

“We produce grapes 52 weeks a year, while in Chile there is only one harvest due to colder temperatures. The same happens in South Africa and California.”

Coelho views the prospective entry into force of the agreement with the European Union positively, even though its full implementation depends on legal and parliamentary procedures:

“The agreement may move toward provisional application while legal review takes place. If the court upholds it, it continues; if not, the process may be halted.”

“As for the European Union’s safeguard measures — designed to protect domestic producers — I don’t have the technical expertise to assess their impact. It shouldn’t be seen as brutal competition where someone necessarily loses. Markets tend to adjust over time.”