The European Union, as announced by Commission President Ursula von der Leyen, will begin to temporarily apply the Mercosur trade agreement, which has been under negotiation for 25 years with the countries of Brazil, Argentina, Paraguay, and Uruguay. This deal is the largest trade agreement in the history of the EU, aimed at creating the world's largest free trade area for over 700 million consumers. It seeks to eliminate over 90% of trade tariffs and open new markets particularly for European industrial goods.

Despite this progress, the Mercosur agreement is not yet fully ratified due to strong opposition within the EU. Earlier in January, the European Parliament narrowly voted in favor of sending the agreement for evaluation by the EU court, which could delay its implementation by up to two years. The commission explained that the agreement can now be applied temporarily two months after the involved parties have been notified, indicating steps towards operationalizing the deal while legal deliberations continue.

The Mercosur trade agreement represents a significant shift in EU foreign trade policy and has broad implications for both EU agricultural sectors and South American economies. It highlights the balance the EU is attempting to strike between opening new markets for its products and addressing internal concerns regarding environmental issues as well as labor standards in the Mercosur countries. As the EU moves forward, it will need to navigate these complex challenges to reap the potential benefits of the agreement for both sides.