The long-awaited deal creates one of the world’s largest free trade areas with 720m potential consumers.By Al Jazeera Staff and The Associated PressPublished On 1 May 20261 May 2026The long-awaited trade deal between the European Union and South America’s Mercosur bloc has provisionally come into effect, boosting business ties amid tariff threats and deepening uncertainty around global cooperation.The pact took effect on Friday after 25 years of negotiations, creating one of the world’s largest free trade areas, with 720 million potential consumers and an estimated value of $22 trillion.Recommended Stories list of 3 itemsend of listThe agreement is only provisionally in effect because it is being challenged by the EU’s judiciary. They are fighting against European Commission President Ursula von der Leyen’s move to sidestep the EU parliament and provisionally enact the deal. The agreement will be halted if the European body rules against itThe agreement, which was signed in January, is designed to lower tariffs and boost trade between the two regions. Together, the EU and Mercosur account for 30 percent of global GDP and more than 700 million consumers.The new treaty will eliminate tariffs on more than 90 percent of bilateral trade and will favour European exports of cars, wine and cheese, while making it easier for South American beef, poultry, sugar, rice, honey and soya beans to reach Europe.“This is good news for EU businesses of all sizes, good news for our consumers and good news for our farmers, who will gain valuable new export opportunities, with full protection for sensitive sectors,” Von der Leyen said on Thursday.The EU leader is expected to hold a videoconference on Friday with leaders of Mercosur nations Brazil, Argentina, Uruguay and Paraguay to celebrate the agreement. Advertisement Reaffirmation of multilateralismEarlier this week, Brazil’s President, Luiz Inacio Lula da Silva, a main supporter of the agreement, signed a decree validating the deal in his country.He said it is a response to unilateral tariffs imposed last yea …
