EU-Mercosur Partnership Agreement and interim Trade Agreement

The interim Trade Agreement at a Glance

On 17 January 2026 the European Union (EU) and the four Mercosur countries Argentina, Brazil, Paraguay and Uruguay signed the EU-Mercosur Partnership agreement (EMPA) and the interim Trade Agreement (iTA). The latter will be repealed and replaced once the EMPA is fully ratified.

On 15 April 2025 the notice concerning provisional application of the interim Trade Agreement as of 1 May 2026 has been published in the Official Journal (OJ L, 2026/868).

More Information

On 27 February 2026 the interim Trade Agreement has been published in the Official Journal (OJ L, 2026/184). To explore the comprehensive text of the agreement, you may navigate to EU-Mercosur: Text of the agreement. Here the text is conveniently divided into chapters and annexes for easy consultation.

The following summary deals with the individual chapters of the iTA.

Highlights

Together, Mercosur countries form the world’s sixth largest economy with a total population of 270 million people.

Bilateral trade in goods between the EU and Mercosur is relatively balanced. In 2024, EU exports to Mercosur amounted to approximately €55 billion, while imports from Mercosur reached around €56 billion.

In services, the EU exported around €29 billion to Mercosur in 2023, compared with €13 billion in imports, with Brazil accounting for more than 70% of services trade.

Investment links are particularly strong. The EU is the largest foreign investor in Mercosur, with accumulated EU investment stocks rising from €315 billion in 2013 to approximately €384 billion in 2023. Mercosur investment stocks in the EU remain comparatively limited.

Against this backdrop, the agreement is expected to reinforce existing trade and investment patterns while improving long-term predictability for economic operators.

The agreement:

• increases bilateral trade and investment, and lowers tariff and non-tariff trade barriers – notably for small and medium-sized enterprises;
• creates more stable and predictable rules for trade and investment through better and stronger rules, e.g. in the area of intellectual property rights (including geographical indications), food safety standards, competition and good regulatory practices; and
• promotes shared values and sustainable development, including by strengthening worker’s rights, fighting climate change, ensuring environmental protection, and encouraging responsible business conduct.

Key Elements of the Agreement

Trade in Goods

The core objective is the progressive elimination or reduction of tariffs. Once fully implemented, the agreement will remove duties on 91% of EU exports to Mercosur and 92% of Mercosur exports to the EU.

Mercosur will eliminate tariffs entirely for most industrial products of key EU interest, while the EU will phase out duties on all industrial goods over a ten-year period. In agriculture, Mercosur will gradually liberalise 93% of agri-food tariff lines, while the EU will liberalise 82% of agricultural imports, granting limited access for remaining products through tariff rate quotas (TRQs).

The agreement also addresses export restrictions. Export duties on key raw materials, such as soybeans or hides and skins, will be reduced or eliminated. Export duties on certain critical raw materials are eliminated in full by Argentina, Uruguay and Paraguay, while Brazil commits to partial elimination or binding upper limits. In addition, the agreement prohibits import and export price requirements and monopolies.

Rules of Origin

Preferential access under the agreement is conditional on compliance with rules of origin. Only goods originating in the EU or Mercosur will benefit from tariff preferences. The agreement introduces modern rules based on exporter self-certification, including the use of the EU Registered Exporter (REX) system or equivalent mechanisms.

Customs and Trade Facilitation

Customs and trade facilitation provisions go beyond existing WTO commitments, aiming to reduce red tape, accelerate customs clearance and enhance transparency. Measures include automation of procedures, strengthened customs cooperation and regular reviews of implementation.

Technical Barriers to Trade

Technical barriers to trade disciplines seek to reduce unnecessary regulatory divergence. The agreement promotes greater alignment with international standards, improved conformity assessment procedures and, in certain areas, acceptance by Mercosur of EU conformity test results. Provisions on marking and labelling are designed to reduce compliance costs for exporters.

Sanitary and Phytosanitary Measures

The agreement includes comprehensive provisions on sanitary and phytosanitary measures. It reaffirms the EU’s stringent SPS standards, which remain non-negotiable, and preserves the EU’s right to regulate based on the precautionary principle. All imports must fully comply with EU import rules.

Dialogues on Issues related to the Agri-food Chain

The EU and the Mercosur countries have agreed to engage in dialogues to strengthen mutual trust and understanding as well as to exchange information on the subjects of animal welfare, the use of biotechnology in agriculture, the fight against antibiotic resistance, and scientific matters relating to food safety and animal and plant health.

Trade Defence and Global Safeguards and Bilateral Safeguard Measures

The agreement confirms the availability of WTO-compatible anti-dumping and countervailing measures and introduces bilateral safeguards. For agriculture, a specific bilateral safeguard regulation provides additional protection against sudden import surges, with clearly defined triggers, enhanced monitoring and a possible time-limited suspension of preferences.

Trade in Services and Establishment

In services and establishment, Mercosur makes commitments across all modes of supply, including investment liberalisation. The agreement improves legal certainty, transparency and regulatory cooperation in areas such as telecommunications, financial services and e-commerce, while explicitly excluding the liberalisation of public services. Provisions on e-commerce prohibit unjustified barriers, ensure the legal validity of electronic contracts and enhance consumer protection.

Current Account Transactions and Capital Movement

The EU and the Mercosur countries have agreed on the free movement of capital for the purpose of making direct investments, which also includes the liquidation or repatriation of such capital. Each party also permits all payments and transfers in freely convertible currencies relating to current account transactions falling within the scope of the agreement.

Government Procurement

The agreement aims to ensure reciprocal and non-discriminatory access to public procurement markets in the European Union and Mercosur. The agreement grants national treatment to locally established suppliers, goods and services, preventing governments from favouring domestic operators over foreign competitors once establishment criteria are met.

For EU economic operators, this represents a significant opening of procurement opportunities in Mercosur markets that have traditionally been characterised by limited transparency and restricted foreign participation. The commitments cover procurement at central government level and, in certain cases, sub-central entities and public undertakings. From a market perspective, those provisions are expected to improve predictability and competitive neutrality in bidding procedures, particularly in infrastructure, transport, energy and public services-related contracts.

Intellectual Property Rights

Comprehensive rules covering the full spectrum of intellectual property rights (IPR) protection and enforcement are provided for, including copyrights, trademarks, designs and patents. It strengthens legal certainty for rights holders through clear commitments and cooperation mechanisms, supported by civil and administrative enforcement provisions.

A dedicated section on geographical indications (GIs) is of particular relevance. The agreement ensures effective recognition and protection of 344 EU GIs and 220 Mercosur GIs, with protection comparable to the EU level. Protection applies from entry into force for most listed names, with only limited exceptions for prior use or prior rights. The agreement safeguards GI names against misuse, imitation and evocation and provides for administrative enforcement in addition to judicial remedies, including border measures. It also allows for additional GI names to be added in the future.

Small and Medium-sized Enterprises

Recognising the challenges faced by smaller operators, the agreement includes a dedicated chapter on small and medium-sized enterprises (SMEs). Its purpose is to ensure that SMEs can effectively benefit from the opportunities created by the agreement.

Key measures include enhanced information sharing on market access conditions and the creation of databases containing tariff, tax and rules of origin information at tariff-line level. The chapter also establishes bilateral cooperation to ensure that SME interests are considered during implementation. While not creating new market access rights, these provisions aim to lower practical barriers to participation in EU–Mercosur trade.

Competition

To ensure a level playing field both parties are required to maintain comprehensive competition laws and independent competition authorities. The agreement does not harmonise competition rules but establishes a framework for cooperation and dialogue between authorities.

Key elements include bilateral consultations in cases of anticompetitive practices that may affect trade or investment between the parties, as well as the exchange of non-confidential information. For traders and investors, these provisions aim to reduce risks linked to market distortions arising from cartels, abuse of dominant positions or anticompetitive mergers, while preserving enforcement autonomy at national level.

Subsidies

The agreement addresses the potential trade-distortive effects of state support while recognising that subsidies may be necessary to achieve legitimate public policy objectives, such as industrial development, environmental protection or social cohesion.

Rather than imposing strict prohibitions, the agreement establishes a cooperation mechanism between the parties. This mechanism focuses on transparency, information exchange and dialogue regarding subsidy practices and control systems.

The agreement signals increased scrutiny of subsidy-related distortions over time, while maintaining policy space for governments. It also lays the groundwork for future cooperation on subsidy transparency.

State-owned Enterprises

A dedicated chapter governs the commercial activities of state-owned enterprises and companies. The enterprises concerned are required to act in accordance with commercial considerations when buying and selling, provided that such transactions do not serve to fulfil a public service obligation. The scope does not extend to the defence sector, public services or enterprises with a turnover below 200 million Special Drawing Rights. It is expressly confirmed that parties may continue to establish state-owned enterprises or maintain monopolies. Provisions on transparency allow for the exchange of information in the event of a potential conflict of interest.

Trade and Sustainable Development

Commitments on labour rights and environmental protection are included in the agreement. The parties commit to respecting and effectively implementing international labour conventions and multilateral environmental agreements, including the Paris Agreement on climate change.

The designation of the Paris Agreement as an essential element of the overall agreement is a notable innovation. It allows for partial or total suspension of the agreement if a party withdraws from the Paris Agreement or undermines it by failing to act in good faith. In addition, the agreement contains legally binding commitments on deforestation, including obligations to take measures to halt deforestation from 2030. This represents the first time such commitments are embedded in a legally enforceable trade agreement rather than political declarations.

Transparency

The agreement aims to promote a predictable and rules-based regulatory environment for economic operators. It requires the electronic publication of trade-related measures, the designation of contact points for enquiries and the objective and impartial administration of regulations.

It also provides for review and appeal mechanisms in trade-related administrative decisions. For traders, these provisions reduce information asymmetries and regulatory uncertainty, particularly in markets where access to timely and reliable regulatory information has traditionally been limited.

Exceptions

The parties are allowed to deviate from trade obligations on grounds of security or to protect public order. Key provisions include the protection of essential security interests, such as defence or crisis management, as well as the possibility of adopting environmental and health measures (in accordance with GATT rules). Furthermore, the agreement regulates the protection of confidential information, fiscal sovereignty to combat tax evasion, and mechanisms for emergencies. Measures that are in line with WTO exemptions are deemed compatible. It is also ensured that exceptions do not lead to arbitrary discrimination.

Dispute Settlement

Procedures are established to resolve disagreements regarding the interpretation or application of its stipulations. It provides for consultations, arbitration panels, binding reports, transparency rules and a code of conduct for panellists. A mediation mechanism is also available as an alternative means of dispute resolution.

The agreement includes a non-violation complaint mechanism, modelled closely on the WTO system. This allows a party to seek remedies where expected benefits are nullified or impaired by measures that do not formally violate the agreement. Such complaints are, however, limited to exceptional and narrowly defined circumstances.

Institutional Provisions

An institutional framework is established to oversee implementation, including joint bodies, regular reviews and mechanisms for dialogue.

General and Final Provisions

A chapter on general and final provisions addresses the territorial application, provisional application and the relation to other agreements, the fulfilment of obligations, private rights as well as the accession of new Member States to the EU or State Parties to Mercosur. It also contains provisions on duration, denunciation and authentic languages and refers to the annexes, appendices and protocols as integral part of the agreement.

Preferential Origin and Tariff Dismantling Agreement

Preferential Treatment

Mutual granting of preferential tariff rates between the four Mercosur countries and the European Union (EU) to enhance trade relations.

Tariff Dismantling

Tariff dismantling commences from 1 May 2026, in accordance with Chapter 2, Article 2.4, and Annex 2-A of the agreement.

Mercosur: Tariff dismantling for import tariffs follows the specifications in Chapter 2, Article 2.4, along with Annex 2-A, Appendix 2-A-2.

EU: Tariff dismantling adheres to Chapter 2, Article 2.4, along with Annex 2-A, Appendix 2-A-1.

Dismantling for export duties in Mercosur is laid down in a separate Annex 2-B

Origin Regulation

Regulations concerning origin are outlined in Chapter 3, Sections A to C of the agreement, including product-specific rules of origin in Annex 3-B and introductory notes to them in Annex 3-A. Special arrangements on product-specific rules for certain products originating in Mercosur are stipulated in Annex 3-B-1.

• OJ L, 2026/184, 27.2.2026, p. 14 (Chapter 3)
• OJ L, 2026/184, 27.2.2026, p. 2156 (Annex 3-A)
• OJ L, 2026/184, 27.2.2026, p. 2163 (Annex 3-B)
• OJ L, 2026/184, 27.2.2026, p. 2215 (Annex 3-B-1)

Proofs of Origin

Formal: Only foreseen on a temporary basis (three years which may be extended for a maximum period of 2 years) for imports into the European Union originating in the Mercosur countries. See Annex 3-D (OJ L, 2026/184, 27.2.2026, p. 2219)

Non-Formal: Statement on Origin

Text of Statement: Reference Annex 3-C (OJ L, 2026/184, 27.2.2026, p. 2216)

Single statements on origin are permissible for importation by instalments of dismantled or non-assembled products classified within HS Sections XV to XXI.

Validity: Statements on origin are valid for 12 months.

Exemptions: Informal declaration of origin is allowed for non-commercial transactions comprising small packages from private persons to private persons and travellers’ personal luggage, subject to the appropriate value thresholds in the country of import.

Rules of Origin

• General Tolerance: 10% of the ex-works price, except for products falling under HS Chapters 50 to 63, for which the tolerances set out in Notes 6 and 7 of Annex 3-A apply.
• Threshold for Sets: 15% of the ex-works price for non-originating components.
• Principle of Territoriality: Compliance is mandatory.
• Non-Manipulation: Compliance is mandatory.
• Prohibition of Drawback: Not applicable.
• Accounting Segregation: Applicable for fungible materials, if an accounting segregation method for managing stocks is used, which accords with generally accepted accounting principles in the Party concerned.

Cumulation

Bilateral cumulation is allowed between the EU and Mercosur, facilitating streamlined trade relations.