European Union and Mercosur celebrate historic free trade agreement

Montevideo, the Uruguayan capital, was the setting for the Mercosur summit, which, on December 5 and 6, brought together the presidents of Argentina, Brazil, Paraguay, and Uruguay, along with a high-level delegation from the European Union, headed by Ursula von der Leyen, president of the European Commission. During this meeting, the presidents announced the arrival of a trade agreement between the two blocs after more than two decades of intense negotiations.

“This is a truly historic day,” said Von der Leyen in her speech, underlining the negotiators’ tireless efforts and the agreement’s importance. The President of the European Commission recalled the beginnings of these dialogues 30 years ago and celebrated their culmination, which will strengthen trade and political ties between Europe and the Mercosur countries.

Uruguayan President Luis Lacalle Pou pointed out that this treaty represents a trade exchange and encompasses various relations linking Mercosur countries with the European Union. In his words, “a pact of this type is not a solution; it is an opportunity” that must be developed with a gradual and consensual approach between the parties.

In economic terms, the European Union has historically been one of Uruguay’s most important partners. In 2023, it was the leading foreign investor and the third destination of its exports. Uruguayan sales to the European bloc totaled US$ 1.93 billion in 2023, with cellulose and beef as the main products. In addition, the European Union accounts for 42% of Uruguay’s foreign direct investment (FDI) stock, driving key sectors such as agriculture, forestry, energy, and global services.

This free trade agreement and opening up new trade opportunities have profound strategic and political implications. Von der Leyen noted that creating a joint market of 700 million consumers will strengthen value chains, develop strategic industries, foster innovation, and generate jobs. This closer relationship responds to an economic need and a political opportunity, sending a clear message to the world about the effectiveness of democratic cooperation.