At the beginning of this year, there were significant developments regarding the European Union–Mercosur Partnership Agreement (EMPA), which includes the Interim Trade Agreement (iTA), aimed at strengthening commercial and institutional relations between the two blocs. The iTA is a provisional agreement and will be repealed and replaced by the EMPA once it is fully ratified.

On January 9, 2026, the Council of the European Union, responsible, among other duties, for negotiating and adopting legislation within the Union, coordinating Member States’ policies, and concluding international agreements, approved the EMPA and the iTA. The formal signing took place on January 17, 2026, in Asunción, Paraguay.

However, just four days after the signing, on January 21, 2026, the European Parliament voted and approved a request for the Court of Justice of the European Union to assess the legal basis of the EMPA. The request was based on three main issues: (i) the possibility of splitting the agreement, originally negotiated as a single mixed instrument, but which covers matters of exclusive competence of the European Union and others attributed to Member States; (ii) the need to clarify the legal compatibility of the treaty with the founding Treaties of the Union; and (iii) whether the division of the treaty into a “Partnership Agreement” (EMPA) and an “Interim Trade Agreement” (iTA) is legally valid and whether the trade rebalancing mechanism complies with European environmental and health protection standards.

These questions have, for now, suspended the ratification process within the European Union, preventing both the European Parliament and the national parliaments of Member States from advancing in the approval of the EMPA agreement. Nevertheless, the European Commission stated that it will continue the provisional application of parts of the trade agreement (iTA). On the Mercosur side, the incorporation of the Treaty into the legal framework of member countries was consolidated on March 24, 2026.

As a result, part of the treaty (iTA) will enter into provisional force on May 1, 2026. This interim agreement covers only trade matters, while the EMPA includes a Political and Cooperation pillar and a Trade pillar.

Negotiations for this agreement have extended for more than 25 years, having gone through economic crises, changes in governments, and movements in production chains. It establishes the foundations of the largest free trade area in the world, involving more than 700 million people.

From the EU perspective, as set out in the Opinion of the European Economic and Social Committee of August 10, 2018, the focus of the agreement was to establish balanced rules that would benefit both blocs in the medium and long term, without sacrificing any sector, such as agriculture or industry, or any particular region or country, all through a participatory, collaborative, and transparent dialogue.

From the Brazilian perspective, as a Mercosur member, the government recognizes in the negotiation of the free trade agreement a path toward the resumption of dynamic and sustainable growth, built upon the pillars of political dialogue, cooperation, and free trade. The idea of the agreement is mutual benefit — a “win-win agreement.”

Despite recent changes and the current moment, in which some countries adopt more protectionist measures, the agreement continues to advance amid doubts and criticism.

It is evident that, for all States Parties, as well as for companies, traders, farmers, and economists, the agreement presents both positive aspects and challenges. In this context, and with the aim of offering the reader also the European perspective and its main concerns, I draw on the contributions of renowned European lawyers, specialists in their respective fields, with whom I discussed the topic.

From France, Oksana Zoppini understands that: The EU–Mercosur agreement offers both significant opportunities and important challenges for France. From a strategic standpoint, it strengthens Europe’s geopolitical ties with South America and opens new possibilities for French industries, especially in the automotive, machinery, chemical, and luxury goods sectors. However, its benefits remain conditional on the effectiveness of environmental safeguards and the ability to preserve fair competition for French and European farmers. The agreement will only be positive for France if commitments related to sustainability, deforestation control, and compliance with EU sanitary and environmental standards are strictly enforced. Without robust guarantees, the risks of market distortion and environmental degradation may outweigh the expected economic gains.

From Germany, Bettina Mertgen highlights that for German industry, the EU–Mercosur agreement offers substantial advantages, as it significantly improves access to a large and rapidly growing market of more than 260 million people. Key export-oriented sectors, such as automotive, mechanical engineering, chemical, and pharmaceutical industries, particularly benefit from the broad reduction of high tariffs that have so far heavily burdened the competitiveness of German products in South America. The agreement also provides more stable and transparent regulatory frameworks, greater intellectual property protection, and the elimination of technical barriers to trade, factors that encourage investment and local production partnerships.

Of special strategic relevance is the facilitated access to critical raw materials, such as lithium, copper, and iron from the Mercosur region, essential for electric mobility, battery technology, and renewable energy. Overall, the agreement strengthens the international competitiveness of German industry, secures supply chains, and opens new opportunities for growth and diversification beyond traditional markets such as the United States and China. However, the referral of the matter to the Court of Justice of the European Union delays rapid implementation and is therefore widely considered a missed strategic opportunity for a stronger and more independent European position in global trade.

At the same time, the EU–Mercosur agreement has also been the subject of criticism in Germany, especially with regard to agriculture, environmental protection, and sustainability. The German Farmers’ Association warns of competitive disadvantages resulting from additional agricultural imports from South America, produced under lower standards of animal welfare, environmental protection, and pesticide use, which could exert significant pressure on the prices faced by domestic farms.

Environmental organizations and sectors of the political spectrum, especially among the Greens, also question the effectiveness and enforceability of sustainability clauses and fear an increase in deforestation and climate damage, particularly in the Amazon region. Critics further argue that although European standards formally apply, their effective monitoring and enforcement in practice are insufficient.

From the perspective of Poland, highlighted by Natalia Kabacinska, the EU–Mercosur trade agreement has generated intense debate in Poland, a country that stands out as one of the main agricultural producers in the European Union. Polish stakeholders are far from unanimous in their assessment of the agreement. While some business sector agents see it as a manageable and even welcome development, others express deep concerns about its potential impact on the domestic agri-food sector.

Within her experience, Natalia shares with us the position of a Polish businessman, Michal Szafarz, from Diet-Food, which illustrates the view of European entrepreneurs engaged in trade between the two blocs. Let us see: When analyzing the agreement concluded between the EU and Mercosur, I do not identify major threats to Polish agriculture or the food processing industry. I am an importer, distributor, exporter, and manufacturer, and in none of these areas of trade with Mercosur countries is there any negative revolution occurring. The much demonized import of beef, which supposedly would flood the EU, will in fact be quite limited, at a level only slightly higher than the current one. Doubts are raised about the quality of products from Latin America, but people forget that these products are already currently imported (this applies to all products, from all parts of the world) under rules that will not change; these products will continue to have to comply with European standards.

Critical voices are spread by people who have no idea how, in practice, the import of goods, their customs clearance, and their placement on the market work, not to mention sanitary and veterinary standards.

Examples are presented of some segments of agriculture that could theoretically be affected by this agreement, forgetting the enormous opportunities that the opening of Mercosur markets could offer, for example, to the dairy industry, confectionery producers, supplement manufacturers, or the pharmaceutical sector.

It should be noted that partnership agreements need to bring benefits to both sides through the opening of their markets. Each party may potentially lose in one area but gain in another, and the agreement cannot be overloaded with the perspective of only a narrow segment of the industry, as in that case we would never be able to conclude any agreement.

However, not everyone in Poland shares this optimism. As noted by Natalia Kabacińska and Magdalena Zielińska-Kuc, from WKB Lawyers, Poland views the Mercosur agreement with considerable skepticism. They highlight that in public debate it is argued that the agreement may significantly alter trade conditions and competition in the agri-food sector. Polish producers fear that, after its conclusion, foods produced at substantially lower costs may enter the EU market (and consequently the Polish market), increasing pressure on the prices of European producers.

They point out that Poland is one of the largest producers of poultry, beef, and sugar in the European Union. Considering that the Mercosur agreement provides preferences precisely for these products originating from bloc countries, Polish farmers fear a real risk of a drop in profitability, which could also negatively affect the labor market, especially in rural areas. A concern also raised by the French farmer.

Natália also emphasizes that the agreement represents an opportunity for Polish food exporters. The Mercosur market is huge: for Polish agriculture, the agreement means access to a market of approximately 270 million consumers. It is therefore a significant opportunity.

From the Brazilian business perspective, the wine and dairy sectors express concern regarding the tariff reduction provided for in the agreement, which tends to increase the competitiveness of European wines and cheeses in the Brazilian market, potentially putting pressure on prices and the competitiveness of domestic production.

On the other hand, the Brazilian furniture sector tends to benefit from the possibility of acquiring advanced technology equipment at lower cost, increasing productivity and capacity to supply furniture at lower costs.

As analyzed, including in light of the relevant contributions of Oksana Zoppini, Natalia Kabacinska, Magdalena Zielińska-Kuc, Michal Szafarz, and Bettina Mertgen, it is verified that the EMPA simultaneously presents opportunities and points of attention for economic agents of both blocs.

In this context, eventual asymmetries or adverse effects may be mitigated through the application of safeguard measures, instruments provided for the protection of sensitive and strategic sectors of national economies.

Ultimately, these are mechanisms for calibrating the treaty itself, a true “fine-tuning,” aimed at rebalancing its practical application and correcting distortions that only become fully identifiable during its implementation.