After 26 years of negotiations, representatives of the regional integration blocs Mercosur and the European Union (EU) are expected to sign, this Saturday (17), a free trade agreement with the potential to integrate a market of around 720 million people (450 million in the EU and around 295 million in Mercosur).
Approved by a large majority of the 27 countries that make up the EU, the treaty will be signed in Asunción, Paraguay – the country that, since December 2025, has temporarily presided over Mercosur.
The signing ceremony will take place from 12:15 pm (Brasília time), at the José Asunción Flores theater, of the Paraguayan Central Bank – the same place where, in 1991, it was The Treaty of Asunción was signed, considered the first step towards the creation of the Southern Common Market (Mercosur), today composed of Argentina, Bolivia, Brazil, Paraguay and Uruguay.
The event will be attended by representatives of member countries, such as presidents Javier Milei (Argentina); Rodrigo Paz (Bolivia); Santiago Peña (Paraguay) and Yamandú Orsi (Uruguay), as well as European leaders, such as Ursula von der Leyen, president of the European Commission, and António Costa, president of the European Council.
Rio de Janeiro (RJ), 01/16/2026 – President Lula receives the president of the European Commission (EC), Ursula van der Leyen. Photo: Tânia Rêgo/Agência Brasil
For scheduling reasons, President Luiz Inácio Lula da Silva will not travel to Paraguay. THE Brazil will be represented at the signing ceremony by the Minister of Foreign Affairs, Mauro Vieira. The day before (16), however, Lula received Ursula and Costa in Rio de Janeiro, where they discussed the implementation of the trade agreement and other topics on the international agenda.
Protocol, the signing of the commercial agreement formalizes the end of the phase of technical and political negotiations that began in June 1999, when the parties began to negotiate its terms. THE The text establishes the gradual elimination of import tariffs for more than 90% of bilateral trade, involving industrial goods (machines, tools, automobiles and other products and equipment) and agricultural products.
After signature, the text will be submitted for ratification to the European Parliament and the national congresses of each Mercosur member country. The entry into force of the commercial part of the agreement depends on legislative approval, with gradual implementation expected over the next few years. Anyway, The expectation is that the treaty will be implemented gradually and that its practical effects will take some time to begin to be felt, establishing the largest free trade zone in the world.
This Thursday (15), the vice-president of the Republic and minister of Development, Industry, Commerce and Services, Geraldo Alckminsaid he believed that the trade agreement comes into force in the second half of this year.
Once signed, the European Parliament approves its law and we, in Brazil, approve the law, internalizing the agreement. We hope that the law will be approved in the first half of the year and that the agreement will come into effect in the second half of the year. Then, it comes into force immediately”, stated Alckmin.
Celebrated by governments and industrial sectors, the agreement is the target of criticism and protests from European farmers who fear competition from South American products, since, among other things, it will eliminate customs duties.
The treaty is also the target of distrust among environmentalists, who criticize possible impacts on the climate and agricultural competition – although the Minister of Environment and Climate Change, Marina Silva, assess that the final text is aligned with the environmental agenda, in terms capable of promoting development and protecting nature.
THE Brazilian Export and Investment Promotion Agency (ApexBrasil) estimates that the Implementation of the agreement could increase Brazilian exports by around US$7 billion and increase the diversification of Brazilian international sales, benefiting the national industry as well.
1. Elimination of customs duties
Gradual reduction of tariffs on most goods and services;
Mercosur: will eliminate tariffs on 91% of European goods within 15 years;
European Union: will eliminate tariffs on 95% of Mercosur goods within 12 years.
2. Immediate gains for the industry
Zero tariff from the beginning for various industrial products.
>> Sectors benefited:
Machines and equipment;
Cars and auto parts;
Chemicals;
Aircraft and transport equipment.
3. Expanded access to the European market
Mercosur companies gain preference in a market with high purchasing power;
EU has GDP estimated at US$ 22 trillion;
Trade tends to be more predictable and with fewer technical barriers.
4. Quotas for sensitive agricultural products
Products such as beef, chicken, rice, honey, sugar and ethanol will have import quotas;
Above these quotas, a fee is charged;
Quotas grow over time, with reduced fares, rather than allowing unrestricted entry;
Mechanism seeks to avoid abrupt impacts on European farmers;
In the EU, quotas are equivalent to 3% of goods or 5% of the value imported from Brazil;
In the Brazilian market, they reach 9% of goods or 8% of the value.
5. Agricultural safeguards
>>EU may temporarily reintroduce tariffs if:
Imports grow above defined limits;
Prices are well below the European market;
Measure applies to chains considered sensitive.
6. Mandatory environmental commitments
Products benefiting from the agreement cannot be linked to illegal deforestation;
Environmental clauses are binding;
Possibility of suspending the agreement in case of violation of the Paris Agreement.
7. Health rules remain strict
EU does not relax sanitary and phytosanitary standards.
Imported products will follow strict food safety rules.
8. Trade in services and investments
>>Reduction of regulatory discrimination against foreign investors.
>>Advances in sectors such as:
Financial services;
Telecommunications;
Transport;
Business services.
9. Public procurement
Mercosur companies will be able to compete for public tenders in the EU;
More transparent and predictable rules.
10. Intellectual property protection
Recognition of around 350 European geographical indications;
Clear rules on brands, patents and copyrights.
11. Small and medium-sized enterprises (SMEs)
Specific chapter for SMEs;
Customs facilitation measures and access to information;
Reduction of costs and bureaucracy for small exporters.
12. Impact for Brazil
Potential to increase exports, especially in agriculture and industry;
Greater integration into global value chains;
Possible attraction of foreign investments in the medium and long term.
13. Next steps
Signing scheduled for January 17th, in Paraguay;
Approval by the European Parliament;
Ratification in the Congresses of Brazil, Argentina, Paraguay and Uruguay;
Entry into force only after completion of all procedures;
Agreements that go beyond trade policy need to be approved by the parliaments of each country.
* Collaborated with Wellton Máximo
