After 25 years of on-again, off-again negotiations that faced multiple last-minute hurdles, the landmark trade agreement between South American trade bloc Mercosur and the European Union is set to enter into provisional force on May 1, according to Brazil’s Vice President Geraldo Alckmin, one of the deal’s chief architects. In an era defined by rising unilateralism and protectionist trade policies across the globe, Alckmin framed the world’s largest trade bloc-to-bloc agreement as a critical beacon for open international commerce during a wide-ranging media interview at Brazil’s presidential palace in Brasilia Wednesday.
Covering a combined market that boasts a $22 trillion gross domestic product and 720 million consumers, the agreement fills a gap that would have left Mercosur falling behind global competitors as other nations locked in new trade pacts, Alckmin argued. Striking a win-win tone, he noted that both populations across Mercosur’s four member states — Brazil, Argentina, Paraguay, Uruguay — and the EU’s 27 member nations will reap economic rewards, projecting Brazil’s annual exports to the EU will jump by roughly 13% once the deal is fully phased in. The agreement was formally signed on January 17, and European Commission President Ursula von der Leyen has repeatedly credited the administration of Brazilian President Luiz Inácio Lula da Silva for pushing the deal across the finish line despite stiff domestic opposition in Europe. As Mercosur’s undisputed economic heavyweight, Brazil accounts for the vast majority of the bloc’s total output, with a projected 2025 GDP of more than $2.3 trillion.
The path to provisional implementation was far from smooth. Fierce pushback from European farm lobbies and environmental activists first derailed a planned finalization in December 2024. The deal hit an additional snag when European parliamentary lawmakers referred the agreement to the EU’s judiciary for review, prompting the EU executive branch to move forward with provisional implementation without formal parliamentary approval. Under the current framework, the agreement will be suspended immediately if the European Court of Justice ultimately rules against it.
A notable political shift paved the way for the deal’s advancement. Two decades ago, Alckmin — then the governor of Brazil’s economic powerhouse Sao Paulo state — and Lula were political rivals on opposite sides of nearly every policy debate, including the EU-Mercosur negotiations. Alckmin supported an early trade pact, while Lula opposed the terms. That dynamic shifted dramatically ahead of Brazil’s 2022 general election, when the two former opponents aligned to unseat far-right President Jair Bolsonaro, whom they cast as a threat to Brazilian democratic institutions. Both politicians moved toward the political center, and Lula appointed Alckmin to his cabinet as trade and industry minister, tapping him to lead negotiations on the trade deal. While Lula’s 2022 election victory (securing him a third non-consecutive term) did not guarantee the deal would move forward, talks gained urgent new momentum after U.S. President Donald Trump took office in 2024 and imposed new tariffs on a range of nations including Brazil.
French President Emmanuel Macron has remained one of the deal’s most high-profile critics, demanding new safeguards to prevent disruptive import surges in the EU, stricter environmental regulations including pesticide limits in Mercosur countries, and enhanced border inspections for South American goods. Alckmin pushed back against widespread claims from EU farming and environmental groups that Mercosur nations lack robust environmental protections, arguing that Brazil stands as a global model for conservation, pointing to a 50% reduction in Amazon deforestation achieved under the current administration. He added that built-in safeguard mechanisms already address concerns about sudden import booms, allowing either bloc to trigger protective measures if imports spike unexpectedly.
Full implementation of the agreement will be phased in over up to 12 years, a timeline Alckmin says is intentional to give Mercosur producers time to boost productivity and upgrade quality across thousands of product lines. Early gains are expected for the bloc’s fruit, beef, and sugar export sectors, with broader benefits expected to spread to other industries over the phase-in period. “It is better to do it gradually than not do it at all,” Alckmin said, calling the agreement “a very well-built deal.” Alckmin also confirmed that Brazil is currently engaged in active negotiations for additional new trade deals with the United Arab Emirates and Canada.