After more than twenty years of negotiations, on January 17, 2026, the Mercosur countries and the European Union (“EU”) signed the Free Trade Agreement (the “Agreement”), which, once it enters into force, will create the largest free trade area in the world. Within the framework of this Agreement, tariff barriers will be eliminated and cooperation between both regional blocs will be promoted.
The Agreement is composed of two parallel legal instruments:
- The EU-Mercosur Partnership Agreement (“EMPA”), which constitutes a comprehensive framework encompassing the political and cooperation pillar as well as the trade pillar. This agreement will enter into force once it has been ratified by all EU Member States. Once in force, it will repeal and replace the International Trade Law.
- An Interim Trade Agreement (“ITA”), which covers exclusively trade-related matters and will require, for its entry into force, only the approval of the European Council and the European Parliament.
As established under the Agreement, the ITA will enter into force earlier and will remain in effect until the EMPA enters into force.
With respect to ratification by Mercosur, the Agreement must be incorporated into domestic law by each Member State. Accordingly, the treaty will enter into force individually for each country as their respective legislatures complete the ratification process and deposit the instrument with the Mercosur Secretariat. In the case of Argentina, through Decree No. 24/2026 published in the Official Gazette of the Argentine Republic, extraordinary legislative sessions were convened to consider the bill approving the Agreement.
As of today, the Agreement is under review by the Court of Justice of the European Union to verify its legality in relation to the EU Treaties, following a referral from the European Parliament. This procedure may take several months to be resolved.
