Xinhua News Agency reported that a free trade agreement (FTA) between the European Union and the Mercosur bloc provisionally entered into force on May 1, with the aim of diversifying the EU’s trade and reducing reliance on the United States. The deal, concluded after 25 years of negotiations and signed in January, is expected to eliminate billions of euros in tariffs and create a market of approximately 720 million people.
Xinhua’s report noted that U.S. President Trump’s tariff policies contributed to the agreement’s conclusion. The European Commission hopes the pact will help offset declining exports to the United States and mitigate potential impacts on gross domestic product (GDP).
Mercosur—comprising Argentina, Brazil, Paraguay, Uruguay, and more recently Bolivia—will benefit from reduced tariffs and more predictable rules governing trade and investment. Ultimately, more than 90 percent of tariffs on bilateral trade are expected to be eliminated, facilitating exports such as European automobiles, machinery, and wine, as well as Mercosur products including meat, sugar, rice, and soybeans.
While the agreement has been approved by Mercosur member states, it remains controversial within the EU. Countries such as France have expressed opposition over concerns about the impact on domestic agriculture. The European Parliament has referred the agreement for legal review, and a final ruling by the EU’s top court could take up to two years.
Source: Xinhua, May 1, 2026
https://www.xinhuanet.com/20260501/49a9b9a632854b3bba49984469d5c3ea/c.html