Free trade agreement
Von der Leyen for EU-Mercosur agreement in Brazil

As of: January 17, 2026 12:18 a.m

After more than 25 years of negotiations, the EU and the South American Mercosur states will today create one of the world’s largest free trade areas. Before the signing, EU Commission chief von der Leyen was received in Brazil.

Before signing the free trade agreement with the South American Mercosur states, EU Commission President Ursula von der Leyen met with President Luiz Inácio Lula da Silva in Brazil.

At the meeting in Rio de Janeiro, she said the agreement sent a strong signal of “partnership and openness.” This is how “real prosperity” is created. “If we deliver with the trade agreement, it will be a success story – written by 700 million people,” said von der Leyen.

“Good for him multilateralism”

Lula said the new partnership goes beyond the economic dimension: “The EU and Mercosur share values ​​such as respect for democracy, the rule of law and human rights.” The agreement is therefore “particularly good for the democratic world and for multilateralism”.

According to many observers, the purpose of the meeting between Lula and von der Leyen in Brazil was to smooth things over ARD correspondent Xenia Böttcher. The contract should actually have been signed in Brazil in December.

But the EU decided to postpone the conclusion of the agreement – due, among other things, to resistance from France, Poland and Italy. Germany was one of the driving forces for this agreement, not least because of the more difficult trade relations with China and the USA.

More than 25 years of negotiations

After more than 25 years of negotiations, the agreement is intended to create one of the world’s largest free trade zones. It is intended to reduce trade barriers, tariffs and taxes between the European Union and Argentina, Brazil, Paraguay and Uruguay and thus simplify the movement of goods.

While Europeans export, among other things, cars and chemical products across the Atlantic, the Mercosur countries mainly deliver agricultural products and raw materials to Europe. According to the Commission’s calculations, the agreement would save around four billion euros in customs duties annually.

Signing in Paraguay

Von der Leyen will now sign the agreement in Paraguay. Paraguay’s President Santiago Peña and Uruguay’s President Yamandú Orsi are also taking part. It was unclear until recently that Argentine President Javier Milei would take part.

Following the signing, the four South American states and the European Parliament must ratify the text. Negotiations on the Mercosur agreement were concluded at the end of last year. Finally, a week ago, the majority of the 27 member states voted in favor of the agreement.

What the Mercosur trade agreement means for Germany

Tobias Faißt, SWR, Evidence Network, Das Erste, January 17, 2026 12:00 p.m