The EU-Mercosur Deal Puts Principles into Practice

By pushing through a long-awaited trade agreement with Mercosur (Argentina, Brazil, Paraguay, Uruguay), Europeans have demonstrated that they can manage their political differences and overcome resistance within and outside their borders. The values that the EU was built on are still alive.

MADRID – When the European Union launched trade negotiations with South America’s Mercosur trade bloc in 1999, the world was brimming with hope. The euro had just made its debut on global markets; Poland, Hungary, and the Czech Republic had emerged from behind the Iron Curtain and were joining NATO in a historic post-Cold War milestone; and a new wave of democratization surged across continents.

More than a quarter-century later, however, the world feels far more uncertain and dangerous. Trade wars, economic and military coercion, and a growing disregard for global norms are eroding the liberal order that delivered decades of shared prosperity and security.

Against this backdrop, the signing of a long-overdue EU-Mercosur agreement in Asunción, Paraguay, this week sends a clear message of hope: Europe will stand firm in defending the rules-based trade and multilateral system on which it was built, and from which democracy and open trade have thrived.

At a time when the “rule of the strongest” seems to be making a comeback, Europe must project global leadership through its values and principles, not brute force. Cooperation and integration should prevail over threats and unilateralism. That is the only way to create prosperity for all.

The agreement with Argentina, Brazil, Paraguay, and Uruguay enshrines our commitment to these principles. As the biggest trade deal that the EU has ever concluded, it will create the world’s largest trade zone, encompassing nearly a quarter of the global economy. Covering a combined population of more than 700 million, the agreement opens vast new markets for businesses on both sides of the Atlantic – markets that are hungry for clarity and predictability amid the fog of protectionism and the uncertainty of ever-changing tariffs. It also positions Europe strategically in a region with immense growth potential. European exports to Mercosur are expected to increase by nearly 70%, and EU companies could save around €4 billion ($4.66 billion) worth of duties per year.

Unlike the trade deals of the 1990s, this is a modern agreement with broader scope to promote true economic resilience. It includes enforceable climate and labor commitments, and it will open service sectors and procurement markets, supporting the creation of high-quality jobs in finance, telecommunications, and technology. It also enhances Europe’s strategic autonomy by fostering cross-border payment systems and bolstering the role of the euro in international trade and as a reserve currency.

Access to critical minerals – such as lithium, cobalt, and rare earths – will reduce Europe’s dependencies and secure supply chains for the green and digital transitions. With global demand for these minerals expected to increase four- to sixfold by 2040, the agreement gives the EU a competitive edge in sectors ranging from electric vehicles and renewable energy to defense.

The deal is also balanced. It offers safeguards for European farmers by maintaining strict EU food-safety standards and implementing other controls, while unlocking opportunities for our world-leading agro-food sector. Spanish trademark products such as olive oil and wine stand to benefit greatly from improved access to South American markets, and the agreement gives Europeans better access to commodities such as soy, helping to diversify our input sources.

More importantly, the agreement reaffirms Europe’s commitment to reclaim its voice on the world stage. While others turn inward, we are expanding our network of strategic allies, negotiating new or updated trade deals with India, Thailand, and Malaysia, among others.

With most EU member states coming together to overcome resistance to the Mercosur agreement, we have demonstrated that we can prevail over political differences within and outside our borders. Showing such resolve is an essential step for the EU to bolster its global credibility and influence. The same determination will help accelerate efforts to tear down internal trade barriers and fully leverage our single market and 450-million-strong population. Europe’s two-pronged approach – expanding its network of trade agreements while deepening internal integration – is the winning formula for competitiveness.

The deal with Mercosur matters even more because our partnership goes beyond economics or transactional logic. Europe and Latin America share deep-rooted values: democracy, the rule of law, and a commitment to multilateralism.

Spain, one of the strongest champions of the agreement, exemplifies the benefits of closer ties with the region. It is the second-largest foreign investor in Brazil, which has helped many Spanish companies in sectors including telecommunications, infrastructure, and clean energy to become global leaders.

We therefore view this agreement as a springboard for deeper engagement with Latin America – engagement rooted in the historic and cultural ties that unite our politically diverse regions. The deal is proof that differences can be overcome through collaboration. If we want a safer, more predictable world, we need more accords like the EU-Mercosur agreements.