On 1 May 2026, the EU-Mercosur Interim Trade Agreement between the EU and the three Mercosur countries – Uruguay, Argentina, and Brazil – will enter into force. An announcement from the fourth Mercosur member state – Paraguay – is also expected shortly, which will allow for provisional application across the entire territory of the agreement.
The provisional application of the agreement will apply solely to trade, ensuring faster access for EU companies, including those from Latvia, to Mercosur markets. According to estimates, the agreement could increase the EU’s annual exports to Mercosur countries by up to 39%. The agreement will also create more than 440,000 jobs in Europe.
Along with the Interim Trade Agreement, the Safeguard Regulation will also enter into force, providing additional protection for sensitive EU agricultural products.
Foreign Minister Baiba Braže:
“The application of the agreement provides significant benefits to the EU, as well as to Latvian exporting companies, in the markets of Mercosur countries, which until now have been difficult to access. The agreement represents a strategic partnership with Latin American countries that will promote European and Latvian exports to new markets and create new jobs. It will create the world’s largest free trade area, covering nearly a quarter of global GDP and creating a market of more than 700 million consumers in the EU and Brazil, Argentina, Paraguay, and Uruguay with great economic potential. For EU companies, the agreement will save EUR 4 billion in customs duties each year, as import tariffs on 91% of EU products in Mercosur countries will be removed.”
BENEFITS FOR LATVIAN COMPANIES
- Entry into the South American market will be eased by lower or entirely removed customs duties and simpler customs procedures. For instance, for the EU, this agreement provides for the removal or significant reduction of customs tariffs on industrial goods, ICT products, and vehicles (currently 14–20% and 35%), and food and beverages (currently 10–55%).
- The agreement provides for lower tariffs on Latvia’s main export products, such as machinery, electrical equipment, timber products, chemicals, pharmaceuticals, and food products, alongside simpler customs procedures.
- The agreement will enable Latvian businesses to participate in global supply chains by cooperating with partners from other EU Member States who already export to this region. Mercosur countries will also open their public procurement markets and reduce barriers in the telecommunications, transport, and financial services sectors.
- Improved digital trade rules will allow Latvia’s IT sector to expand into the Mercosur market. Additionally, Latvian companies already active in the Brazilian market will benefit from the opening of the services sector, the removal of tariffs on machinery and electronics, etc.
- The agreement provides for specific solutions for the involvement of small and medium-sized enterprises in trade.
The Interim Trade Agreement can only be applied between the EU and those Mercosur countries that have ratified it. Meanwhile, the national parliaments of EU Member States will decide on the ratification of the Partnership Agreement, which has a broader scope, covering political and other forms of cooperation in addition to trade issues.
Additional information
- Uruguay, Argentina, and Brazil (three of the four Mercosur member states) have informed the European Commission that they have completed the agreement’s ratification, allowing for its provisional application to begin. An announcement from the fourth Mercosur member state – Paraguay – is also expected shortly, which will allow for provisional application across the entire territory of the agreement.
- On 9 January 2026, EU Member States agreed to support the signing of the EU-Mercosur Interim Trade Agreement and the Partnership Agreement. On 17 January 2026, on behalf of the EU, they were signed by the President of the European Commission, Ursula von der Leyen.
- Mercosur (Mercado Común del Sur), or the Southern Common Market, is the leading trading bloc in South America, and currently its full members are Argentina, Brazil, Uruguay, and Paraguay.
- The agreement includes balanced protection for sensitive product categories in the EU agricultural sector (e.g. beef, ethanol, honey, sugar, poultry) in cases where increased imports from Mercosur countries would cause significant damage to EU producers. In order to ensure the protection of sensitive categories of EU agricultural products under the agreement, the EC has proposed a Regulation setting out procedures for the timely and effective implementation of bilateral safeguard measures for agricultural products. The EC will constantly monitor market trends with regard to the imports of sensitive agricultural products.
- The EU External Trade Policy is the exclusive responsibility of the EU, with the EC drafting trade legislation, conducting negotiations, and concluding international trade agreements.
- EU countries give the green light to the signing of the EU-Mercosur agreement. This will expand trade and export opportunities with Argentina, Brazil, Uruguay, and Paraguay, and also strengthen the EU competitiveness