The EU-Mercosur agreement will have winners and losers – but it won’t make a major economic impact

Ursula von der Leyen, President of the European Commission, meets with Mercosur leaders at the 65th Mercosur Summit Meeting in Montevideo, Uruguay. European Union, CC BY

On January 17, representatives of the EU and the Mercosur (Argentina, Brazil, Paraguay and Uruguay) will sign a free trade agreement in Paraguay. The accord, 25 years in the making, will create the world’s largest free trade area, with over 700 million consumers and a total trade volume of over €111 billion in 2024.

The agreement has broad support from the continent’s business community, but it has met with resistance and protests from the farming lobby. They claim cheaper imports from South America will undercut their livelihoods and weaken food standards.