EU Council Decision Approving the EU–Mercosur Agreement Marks a Major Milestone

The decision of the EU Council to approve the agreement between the European Union and the Mercosur countries represents a major milestone for European trade policy. The agreement opens access for European companies to a market of approximately 270 million consumers and is an important instrument for strengthening the EU’s competitiveness, economic resilience, and strategic autonomy.

European businesses have long stressed that in today’s unstable geopolitical and geo-economic environment, the diversification of trade relations is not a question of choice but a necessity. In this context, the EU–Mercosur agreement is one of the key pillars of the EU’s diversification strategy.

BusinessEurope, the Confederation of European Business – of which the Confederation of Industry of the Czech Republic is an active member – welcomed the decision of the EU Council and described it as a breakthrough step towards the implementation of the long-negotiated agreement. BusinessEurope President Fredrik Persson underlined that the agreement will provide European companies with new opportunities in a region of strategic importance and contribute to strengthening rules-based trade with like-minded partners.

Benefits for Companies and SMEs

The EU–Mercosur agreement will bring European businesses not only a broader market access, but also tangible economic benefits. The removal of tariff and non-tariff barriers is expected to generate savings of up to €4 billion per year. Significant opportunities will open up especially for small and medium-sized enterprises, which will benefit from improved conditions for exporting goods and services and from stronger integration into global value chains.

From the perspective of Czech companies, Latin America has long been a promising but still underutilised region. As the Confederation of Industry of the Czech Republic has repeatedly pointed out, the conclusion of the EU–Mercosur agreement would significantly help to remove barriers that currently hinder the full development of trade relations between the EU and the Mercosur countries.

A Long-Standing Priority for European Business

In the past, the Confederation of Industry of the Czech Republic joined calls by European business organisations urging EU political leaders to move the EU–Mercosur agreement forward towards ratification. Businesses on both sides of the Atlantic have repeatedly stressed that the agreement is crucial not only from an economic perspective, but also from a geopolitical one, as it strengthens cooperation between democratic partners and reduces the EU’s dependence on a limited number of markets.
The approval of the agreement by the EU Council therefore sends an important signal that the European Union takes the needs of its industry seriously and is committed to open, predictable and rules-based trade.

Next Step: Ratification by the European Parliament

However, the process is not yet complete. For the agreement to enter into force, it must now be approved by the European Parliament. European business therefore calls on Members of the European Parliament to support ratification and enable the swift implementation of the agreement.

The EU–Mercosur agreement represents one of the cornerstones of the European Union’s future economic and geopolitical position. Its completion would send a clear signal that Europe remains open to cooperation, supports the competitiveness of its companies, and actively responds to a changing global environment.

Radek Špicar, Vice-President of the Confederation of Industry of the Czech Republic, adds:

“The approval of the EU–Mercosur agreement by the EU Council is a crucial step towards strengthening the competitiveness of European and Czech companies. At a time of growing uncertainty in the global economy, the European Union needs to expand its trade relations and reduce its dependence on a limited number of markets. The agreement with Mercosur opens up new opportunities for Czech exporters and sends a clear signal that the EU is serious about open and rules-based trade. At the same time, I hope that this year we will visit the region with political representatives as part of trade missions.”

Useful links and additional information:

• Dedicated website on the agreement by the European business confederation BusinessEurope
• Impact study of the EU–Mercosur Free Trade Agreement – a win-win for both sides (a study by BusinessEurope’s Swedish partner confederation on the positive impacts of the agreement)
• Joint statement by BusinessEurope and the Brazilian National Confederation of Industry (CNI)
• Analysis by the Austrian partner federation IV on the benefits of the EU–Mercosur agreement (available in German)
• The Czech Ministry of Industry and Trade (MIT) published a study on the impacts of the EU–Mercosur Economic Partnership Agreement on the Czech economy (available in Czech)