The European Commission has formally proposed the signature and conclusion of two landmark trade agreements: the EU-Mercosur Partnership Agreement (EMPA) and the EU-Mexico Modernised Global Agreement (MGA). The proposals aim to deepen economic and political ties with “trusted partners” in Latin America, aligning with the EU’s broader strategy of trade diversification and supply chain de-risking.
These deals, described as “strategic instruments” by senior EU officials, are set to expand the bloc’s economic influence while countering the growing alignment among autocratic states.
High Representative Kaja Kallas underlined the agreement's geopolitical importance:
“In today’s complex geopolitical context, Europe needs alliances with trusted partners more than ever. These Agreements create stability in a world marked by uncertainty.”
She included a stark warning:
“While Western leaders gather in diplomacy, an autocratic alliance is seeking a fast track to a new world order. President Xi stood today with the leaders of Russia, Iran, and North Korea. These are not just anti-Western optics—this is a direct challenge to the international system built on rules.”
Kallas underscored the geopolitical urgency of expanding trade with like-minded nations, citing the EU-Mercosur and Mexico deals as essential to bolstering Europe’s economic resilience, reinforcing multilateralism, and confronting destabilizing forces.
“These agreements go beyond trade. They are an example of the EU’s fundamental commitment to build alliances that protect both sides.”
Kallas also emphasized the EU’s support for Ukraine:
“Russia shows no real wish to end this war… In the event of a truce, a strong Ukrainian military is the strongest security guarantee there is.”
Commissioner Maroš Šefčovič outlined the economic and strategic magnitude of the EMPA:
Will create the largest free trade area globally, covering 700+ million consumers.
€112 billion in current bilateral trade; over 30,000 EU SMEs already active in Mercosur markets.
EU exports expected to increase by €50 billion (+39%) with €4 billion/year in tariff savings.
344 EU Geographical Indications protected, with tariffs on key exports (e.g. cars, wine, pharmaceuticals) significantly reduced or eliminated.
Projected EU GDP gain of €77.6 billion by 2040.
Šefčovič noted:
“This is about more than just numbers… The EU’s extensive network of free trade agreements is a strategic asset for maintaining our global economic edge.”
The revised MGA will eliminate nearly all remaining tariffs on EU exports, particularly agri-food products such as cheese, pork, and wine. Key provisions include:
Protection for 567 EU Geographical Indications.
Improved access to critical raw materials: fluorspar, bismuth, and antimony.
New digital trade and public procurement opportunities.
Šefčovič emphasized:
“Mexico is our second-largest trading partner in Latin America… This modernisation is essential—not only for economic growth, but for strategic resilience.”
Kallas and Šefčovič also discussed the EU-U.S. agreement concluded in July, securing:
15% tariff cap on autos and auto parts (effective August 1).
Carve-outs for pharmaceuticals, chemical precursors, and natural resources (effective September 1).
Šefčovič defended the deal:
“A trade – and political – escalation would have served no one, except our global strategic rivals.”
Both EMPA and MGA require ratification by the European Parliament and all Member States. To expedite implementation, the Commission has also proposed Interim Trade Agreements (iTAs)—limited to areas of exclusive EU competence—to be adopted through the standard EU legislative process.
EU-Mercosur Partnership Agreement
EU-Mercsour Agreement In Focus
Factsheets
EU-Mexico Modernised Global Agreement
Factsheets:
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