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Free trade agreement: Mercosur and Europe are drastically strengthening trade!
On July 3, 2025, Mercosur and European countries will conclude a free trade agreement to strengthen trade and the economy.
Free trade agreement: Mercosur and Europe are drastically strengthening trade!
On July 3, 2025, the Mercosur countries, which include Brazil, Argentina, Paraguay, Uruguay and Bolivia, concluded a significant free trade agreement in cooperation with several European countries. These European countries are Norway, Iceland, Switzerland and Liechtenstein. Argentine Foreign Minister Werthein highlighted the benefits of the agreement, particularly the increase in bilateral trade that benefits both citizens and businesses in these regions.
The European Union (EU) is also seeking a comprehensive free trade agreement with the Mercosur countries. EU Commission President Ursula von der Leyen signed the trade agreement in December 2024. However, ratification at EU level and by individual member states is still required before the agreement comes into force.
The role of the EU in world trade
The EU is considered one of the most outward-oriented economies in the world and has the largest internal market. According to the EU website Free trade between member states is a fundamental principle of the Union. Opening up world trade is one of the EU's important goals. Between 1999 and 2010, the EU's foreign trade more than doubled and now accounts for over 30% of gross domestic product (GDP).
The trade policy of the EU countries is the responsibility of the Union, which conducts negotiations with third countries. The EU speaks with one voice on trade issues, giving it additional weight in international conversations. Strong relationships with countries and regional groupings are crucial to negotiate beneficial trade agreements that improve access to partners' markets.
Advantages of free trade
The newly concluded trade agreements will allow EU companies to expand their businesses and import raw materials more easily. Each trade agreement is a unique treaty that regulates various aspects, such as tariff reductions, intellectual property regulations, sustainable development and human rights clauses. The EU website emphasizes that the contributions of citizens, businesses and non-governmental organizations are also taken into account in the negotiation of these agreements.
In summary, the aspirations of the EU and the Mercosur states expressed in this agreement are aimed at promoting trade and thus realizing both economic and social benefits. While the agreement still awaits ratification, it demonstrates the parties' commitment to active and fair global trade.