EU–Mercosur on the final stretch

Overview

On January 9, 2026, the EU Member States cleared the way for the signing of the EU–Mercosur Partnership Agreement (EMPA) and an Interim Trade Agreement (iTA), making a historic milestone following over 25 years of negotiations.

The iTA aims to provide provisional trade benefits access, while the comprehensive EMPA also includes political and cooperation chapters and requires ratification by all Member States. Approval by the European Parliament is indispensable for the EMPA to enter into force. The Mercosur representatives are scheduled to sign on January 17, 2026, in Asun-ción.

The agreement establishes one of the world´s largest free‑trade areas and aims, among other things, to enhance the competitiveness of EU exports currently facing high third‑country tariffs (e.g., up to 35% on autos and parts), to reduce non‑tariff barriers and to strengthen sustainability standards. To address concerns regarding sensitive agricultural imports, provisions such as safeguard clauses, quotas and crisis mechanisms are foreseen; in parallel, import controls (e.g., pesticide residues) have been tightened. Sustainability and labor‑rights chapters form a central framework.

In 2024, the value of goods traded between the EU and Mercosur totaled around €111bn. Modeling indicates overall positive, albeit uneven, effects with clear advantages for EU in-dustries. Politically, resistance – especially from agriculturally oriented Member States—remains visible; parliamentary proceedings should therefore be closely monitored.

Practical implications: what is likely to change?

1. Tariff reduction, market access and rules of origin

• Tariff cuts on over 90% of bilateral goods trade over transition periods (many EU in-dustrial goods already under the iTA). For EU exports, ~91% will become duty‑free within 15 years; conversely, EU tariffs on the Mercosur side will be largely eliminat-ed. Automotive tariffs up to 35% will be phased out. Strict compliance with Rules of Origin (local value‑added/list rules) is business‑critical.
• Agriculture and raw materials: Greater market access for Mercosur agricultural products (quota‑based with safeguards); conversely, EU industrial goods, foods and beverages will benefit, including those with protected geographical indications (PGI).
  

2. Sustainability, compliance and supply chains

• TSD chapter (Trade & Sustainable Development) with commitments on labor and environmental standards, deforestation prevention and monitoring mechanisms; flanked by EU instruments (e.g., tighter import controls, deforestation‑free rules). Companies should adapt due‑diligence processes and supply‑chain tracing.
  

3. Non‑tariff barriers & regulation

• Simplifications in technical regulations, conformity assessment and approvals can reduce time‑to‑market. In parallel, product safety, chemicals (REACH‑like), data‑ and consumer protection requirements remain in force.
  

4. Public procurement & dispute resolution

• Improved public‑procurement opportunities in selected sectors (country‑specific) and clearer dispute‑resolution mechanisms (with a dedicated procedure for the TSD chapter).
  

What companies should focus now on

1. Mercosur impact scan

• Mapping of tariffs and market access (rates, transition periods, quotas, safeguards), Rules of Origin incl. supplier declarations and HS/Combined Nomenclature classifi-cation.
  

2. Market strategy & go‑to‑market

• Compare sales, JV or M&A options; greenfield vs. brownfield; screen public infra-structure/energy programs.
  

3. Regulatory & compliance readiness

• Model sustainability and compliance requirements.
  

4. Supply‑chain design

• Localization levels for origin rules, safety stocks, service network; update contracts (Incoterms, liability, force majeure, arbitration).
  

5. Financing check

• Use EU crisis funds or incentive programs to cushion impacts.
  

How Deloitte Legal and Deloitte support

As an interdisciplinary team of lawyers, tax and regulatory experts, compliance and sus-tainability specialists, we offer:

• Deep expertise in customs, trade and sanctions topics related to Mercosur.
• Support to embed sustainability requirements lawfully into business processes.
• Comprehensive advice on supply‑chain optimization, subsidiary structuring and grant applications.
• Comprehensive advice on Joint Venture and M&A Projects, in Germany and LATAM.
• Close collaboration with Deloitte teams—logistics, tax advisory and HR.

Date: January 14, 2026