The EU-Mercosur agreement provisionally enters into force: what measures come into force?

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After more than 25 years of negotiations, one of the largest free trade zones in the world began operating this Friday, May 1. The agreement between the European Union and Mercosur — which has more than 700 million consumers — will eliminate more than 90% of current tariffs on exports. Although it is awaiting a court ruling following the appeal presented to the Court of Justice of the European Union, the pact comes into operation and reinforces multilateral cooperation mechanisms, in contrast to the protectionist tariff policy of the White House.

First modification: 05/01/2026 - 19:51 Last modification: 05/01/2026 - 20:03

The European Union and the South American bloc Mercosur—made up of Argentina, Brazil, Paraguay and Uruguay—are implementing a controversial free trade agreement starting this Friday, May 1, the negotiation of which lasted more than 25 years.

"Today, the EU-Mercosur agreement begins to be applied provisionally. The benefits are real and visible from now on"

The proposal involves the creation of a market of 700 million consumers in which more than 90% of current tariffs will be eliminated, some immediately.

"Today, the EU-Mercosur agreement begins to be provisionally applied. The benefits are real and visible from now on. Tariffs are beginning to fall. Companies are gaining access to new markets. Investors have the predictability they need. The provisional application will show the tangible benefits of the agreement," said the President of the European Commission, Ursula von der Leyen, in a post on social networks.

Together with the president of the European Council, António Costa, the leader of the European Commission met this Friday electronically with the four leaders of Mercosur.

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The pact, valued at 22 billion dollars, was signed on January 17 during a meeting of South American countries.

European supporters of the deal, including Germany and Spain, say it will help offset the impact of tariffs imposed by US President Donald Trump and reduce dependence on China for critical minerals.

In addition, they hope that the EU's biggest agreement on tariff reductions will quickly benefit exporters, so that when the EU General Assembly votes on the measure, perhaps in a couple of years, the advantages will be evident.

Opponents of the proposal, including France, argue that the pact will increase low-priced imports of meat and sugar, harming domestic farmers.

Given this concern, Brussels agreed on safeguard measures, such as the possibility of temporarily suspending tariff advantages for products such as beef, chicken, sugar, eggs or citrus.

The European Commission must evaluate whether to take these measures in the event that imports of agri-food products increase by 5% over the three-year average and, at the same time, import prices are 5% below the price in the EU.

The validity of the pact is subject to the approval of the European Parliament, which voted in January to challenge it before the Court of Justice of the EU, in an action supported by the European Left and far-right groups, some MEPs from the European People's Party (mainly the Polish ones), French MEPs from all groups and environmentalists - who claim that the initiative will increase the destruction of the rainforest.

However, the court could take up to two years to issue a ruling, so the European Commission decided to provisionally apply the agreement.

If the European Parliament rejects it, the trade agreement will no longer apply, although the European Commission has been convinced of the legality of the pact and the possibility of implementing it provisionally.

Read alsoThe EU will temporarily apply the agreement with Mercosur: for which products is the tariff reduction being considered?

Sectors benefited by the agreement

The main exports from the European Union to the Mercosur countries come from the automotive, wine, pharmaceutical and technology sectors, which as of this Friday will begin to enjoy a notable reduction in tariffs to market their products in South America.

The 35% tax for the automotive industry will be progressively reduced until it disappears completely in 15 years for combustion vehicles and in 18 years for electric vehicles.

Importers of wines, taxed at 27%, will enjoy a total elimination of this tariff in the eighth year, although high-end sparkling wines are exempt from today and low-end wines will have to wait until 12 years.

Likewise, the 20% tax on European imports of machinery will be eliminated within a maximum period of 15 years.

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From the other side of the Atlantic, the main exports are grouped in the agri-food sector, which is why the EU established quotas for 21 products in that industry.

Thus, South American countries will be able to send 99,000 tons of beef per year at a tariff of 7.5% - outside the quota they will have to pay up to 50% taxes. Chicken meat will not pay an export tariff for a quota of 180,000 tons per year.

At the same time, sugar from Brazil will be able to be exported tariff-free to the EU at a quota of 180,000 tons per year, while that from Paraguay will be limited to 10,000 tons.

In the citrus field, the marketing of lemons will be tariff-free in seven years and that of oranges and mandarins, in 10.

Honey and eggs will also not pay taxes upon entering the EU, at a quota of 45,000 and 3,000 tons per year respectively.

The Community Executive committed to strengthening phytosanitary controls at the borders to ensure that food entering the European Union complies with community rules and thus avoid possible unfair competition.

Read alsoThe European Parliament paralyzes the EU - Mercosur agreement and refers it to the highest court

Agreements to weather White House policies

Aside from the economic effects of the EU-Mercosur agreement, the entry into force of the pact served to the signatories to demonstrate their confidence in international cooperation mechanisms.

"A resilient multilateral system is based on 'win-win' agreements like this one, based on rules, values and shared interests," said the president of the European Council, António Costa, on social media.

Along the same lines, the president of Brazil, Luiz Inácio Lula da Silva, signed a decree at the beginning of the week to validate the agreement within its borders, after ensuring that it is a response to the unilateral tariffs imposed by the White House.

“Nothing better than believing in the exercise of democracy, in multilateralism and in cordial relations between nations,” Lula said at a ceremony in the capital. Brazil is by far the largest economy in Mercosur, with a gross domestic product estimated at more than $2.3 trillion in 2025.

Since Trump's return to the White House, the EU has concluded trade agreements with India, Indonesia, Australia and Mexico.

Brussels has estimated that the agreement with Mercosur will boost the EU's GDP by 0.05% in 2040, while the agreement with India, which the EU has called "the mother of all agreements", could add 0.1% to GDP, according to the Kiel Institute for the World Economy.