The Mercosur deal is a much-needed win for the EU

Last Friday, EU leaders passed the EU-Mercosur trade deal after 25 years of negotiation. With US President Donald Trump bearing down on Europe, this represents an unmitigated win for EU Commission President Ursula von der Leyen and Europe’s geopolitical position.  

Yes, the usual EU disunity was on full display in the run-up. Yes, it took painful concessions to Europe’s farmers to get it over the line. Yes, the interim deal still has to clear the European Parliament. But in the grand scheme of things, the fact that the deal was inked outweighs its deficiencies. 

While flawed, the Mercosur deal is a step in the right direction – less because of its economic impact, which even optimistic forecasts suggest will be modest – than because of the geopolitical context in which it lands.  Throughout 2025, Trump tore at the multilateral trade order and cast doubt on his country’s commitment to its closest partnerships. The assault on Venezuela and renewed threats to purchase or take Greenland by force suggest 2026 is on track to continue in the same vein.  Against a backdrop of Trumpian tariffs, coercion and unilateralism, the Mercosur agreement signals that negotiated, rules-based and beneficial trade deals are still possible.  

This matters for strategic autonomy. EU leaders have bent over backwards to keep Trump on board with the bloc’s priorities in Ukraine and on security policy in general, even going as far as to sign a fundamentally unbalanced trade deal last summer. This must stop. Europe must define its place in the world, without the US.  

The Mercosur deal also opens new commercial opportunities for EU businesses squeezed between a tighter US market and import pressure from China. Along with closer alignment with the Asian Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the agreement showcases the EU to its partners in the Global South as a reliable, if slow-moving, counterpart willing to anchor economic relations in predictability rather than coercion. 

Much remains to be done for the deal’s promise to become a commercial and diplomatic reality. It is, after all, just a trade deal, not a geopolitical panacea. But the deal is grounds for some optimism in an otherwise bleak start to 2026.  

Varg Folkman is a Policy Analyst in the Europe's Political Economy programme.  

Ian Hernandez is a Junior Policy Analyst in the Europe's Political Economy programme. 

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