Rollercoaster Negotiations

The Mercosur Free Trade Agreement negotiations had been ongoing for over 25 years before the European Union and four of the Mercosur states –Argentina, Brazil, Paraguay and Uruguay – signed the deal in Asunción, the Paraguayan capital, on 17 January 2026. The Agreement, which Friedrich Merz, Federal Chancellor of Germany, hailed a milestone in European trade policy, would achieve one of the largest free trade areas in the world with more than 700 million citizens.

However, this partnership agreement is not welcomed by everyone. In fact, a few days after the agreement was signed, the European Parliament called on the European Court of Justice (ECJ) to examine whether the agreement was compatible with basic EU treaties. Consequently, the ratification of the Agreement by the European Parliament has been put on hold. Experts talk of the review leading to the ratification being postponed by two years or even called into question. The rollercoaster ride may very well continue.