The World's Biggest Free Trade Zone in the Hands of the Member States

In September 2025, the European Commission has transmitted the EU-Mercosur trade agreement to the Council – an important first step towards ratification. We urge all Member States to seize this golden opportunity.

After 25 years of negotiations, in December 2024, the European Union and Mercosur countries -Argentina, Brazil, Paraguay, and Uruguay - reached a political agreement for a ground-breaking agreement. It will eliminate billions in tariffs by cutting duties on over 91% of EU goods exported to Mercosur countries.  

Moreover, the agreement will open new opportunities by creating a high-potential market of over 750 million consumers, improving access to crucial raw materials, and promoting fair and rules-based trade. Crucially, it also provides dedicated support for SMEs through improved market access and simplified compliance processes.

We are at a crossroad, and Europe cannot afford to be hesitant. As our global competitors move swiftly to secure influence and market share, the EU must not waste this first-mover advantage. As the European Council evaluates the finalised text, we urge all Member States to ratify it and not to yield to agri-food lobby.

For Czech industry, reducing both import and export dependencies is essential, as these make it vulnerable to global fluctuations.

„The Mercosur markets represent a very interesting opportunity to diversify foreign trade, both in terms of exports and imports of certain key raw materials and products. The agreement has a strategic dimension, as the EU will become the first major foreign partner with which the Mercosur bloc has concluded such a deal. If the EU rejects the agreement, our place will be taken by other partners, including China,“ said the Czech Minister of Industry and trade, Lukáš Vlček.

Tariffs 

The EU–Mercosur agreement will significantly reduce the considerable tariff burden for European exporters, with estimated annual savings for Czech companies of nearly CZK 2.19 billion, according to an impact study by the Technical University of Liberec, prepared on behalf of the Ministry of Industry and Trade in 2023. 

While Czech exporters currently face tariffs of up to 35% in the automotive sector, ratification will remove 91% of tariffs on goods exported from the EU. Most tariffs will be removed gradually, over transition periods ranging from 4 to 15 years. At a time when the automotive industry – the backbone of the Czech economy – faces major challenges, strengthened exports to Latin America would provide a significant boost.

Non-tariff barriers

A fundamental shift will also occur in the reduction of non-tariff barriers, which are generally far higher than tariff ones. Czech exporters to Mercosur countries currently face non-tariff burdens more than double that of tariffs, amounting to 49.57% of the value of exported goods. 

It is expected that once fully implemented, the agreement will save Czech exporters up to CZK 4.36 billion annually on non-tariff measures, in addition to tariff savings. The deal will simplify product certification processes and deepen regulatory cooperation between the two markets to reduce duplicate testing and controls – particularly in engineering, electrical, automotive, pharmaceutical, and food industries, as well as in access to public procurement. For services, the reduction of non-tariff burdens is expected to generate annual savings of up to CZK 3.35 billion.

For more information, please visit the BusinessEurope’s dedicated page: EU-Mercosur trade agreement - Now is the time.

Sources: BusinessEurope, European Commission, the Czech Ministry of Industry and Trade