EU-Mercosur Interim Trade Agreement begins provisional application
Date of publication: May 8, 2026
Overview
The EU-Mercosur Interim Trade Agreement (ITA) begins provisional application on May 1, 2026, allowing the trade pillar of the broader EU-Mercosur framework to take effect before the full EU-Mercosur Partnership Agreement (EMPA) completes ratification. The agreement applies between the European Union and the four founding Mercosur countries: Argentina, Brazil, Paraguay, and Uruguay.
For companies trading between the two regions, this is an important development. The ITA is intended to expand market access, reduce tariffs and non-tariff barriers, improve conditions for services and investment, and strengthen access to government procurement and raw materials. It also includes updated sustainability commitments, including stronger language on climate and deforestation.
Background
EU-Mercosur negotiations began in 1999. Negotiations on the trade component were concluded on June 29, 2019, and the political agreement on the improved overall package was reached on December 6, 2024. To allow the trade elements to take effect sooner, the final framework was split into two legal instruments:
- the EU-Mercosur Partnership Agreement (EMPA), covering political dialogue, cooperation, and trade; and
- the Interim Trade Agreement (ITA), covering trade matters and intended to apply ahead of the EMPA.
The Council authorized signature of both agreements on January 9, 2026, and the EU and Mercosur signed them on January 17, 2026. Under the agreed procedure, the ITA could be applied provisionally once internal procedures were completed and notifications exchanged. According to the European Commission, all four Mercosur countries completed those steps in March 2026, enabling provisional application from May 1, 2026.
Key regulatory and commercial impacts
The ITA is expected to deepen bilateral trade and investment relations between the EU and Mercosur, creating new opportunities for businesses by:
- Removing import duties on over 91% of EU goods exported to Mercosur.
- Simplifying customs procedures and reducing non-tariff barriers
- Improving access to raw materials that are strategically important to the EU economy.
- Facilitating the provision of services by EU companies in Mercosur markets
- Creating more predictable conditions for establishment and investment
- Enhancing access for EU companies to government procurement opportunities
- Supporting small and medium-sized enterprises (SMEs) through easier access to trade opportunities
The agreement is particularly relevant for sectors currently subject to relatively high Mercosur tariffs:
Sector | Mercosur Tariff |
|---|---|
Cars | 35% |
Clothing and textiles | 35% |
Leather shoes | 35% |
Spirits | 20-35% |
Wine | 27% |
Machinery | 14-20% |
Car parts | 14-18% |
Chemicals | up to 18% |
Pharmaceuticals | up to 14% |
From the start of provisional application, the agreement is expected to eliminate or substantially reduce tariffs on key exports such as cars and pharmaceuticals, while also delivering an initial tariff reduction for a range of agri-food products, including wine, spirits, and olive oil.
The EU sees the agreement as strategically important for securing sustainable access to raw materials needed for industry and the green transition, including lithium, natural graphite, niobium, manganese, silicon metal, vanadium, and tantalum. It is intended to make trade and investment more predictable, reduce supply chain distortions, and deliver significant commercial benefits for manufacturers, battery value chain firms, and industrial importers.
Sustainability and compliance considerations
The agreement includes a significant sustainability dimension, with provisions covering:
- Trade and sustainable development, including labour rights, environmental protection, and the effective implementation of the Paris Agreement.
- climate and forest protection, including commitments aimed at addressing deforestation and illegal logging.
- responsible supply chains, encouraging adherence to internationally recognized standards on responsible business conduct; and
- energy and raw materials, supporting secure and sustainable access to critical raw materials needed for the green and digital transitions.
- The updated EU-Mercosur framework elevates compliance with the Paris Agreement to an essential element of the broader arrangement. A serious breach of this commitment, or withdrawal from the Paris Agreement, may permit suspension of the agreement under the applicable framework.
- At the same time, the agreement does not displace existing EU regulatory obligations. Companies importing relevant goods into the EU should continue to monitor compliance with separate EU legislation, including rules relevant to deforestation-related products, product standards, and customs requirements. This is especially important for businesses trading in agricultural products, forest-risk commodities, and complex manufactured goods with upstream raw material inputs.
Assessing the EU-Mercosur trade deal: Tariffs, market access, and more
The agreement is applicable to 12,777 CN codes, excluding Chapters 14, 26, 30, 47, 48, 49, and 80.
The agreement establishes a substantial combined market and is expected to generate significant commercial benefits. The EU exported EUR55 billion in goods to Mercosur in 2024, while services exports reached EUR28.6 billion in 2023. EU investment stock in Mercosur stood at EUR388 billion in 2023. More than 30,000 EU SMEs export to Mercosur, and EU factsheets state that EU exports to Mercosur support more than 600,000 jobs in the EU.
Beyond tariff cuts, the agreement is expected to improve market access through rules on customs, technical barriers to trade, services, establishment, public procurement, and digital trade. It covers key service sectors such as finance, postal services, telecommunications, and maritime transport, and facilitates the temporary movement of business visitors and service suppliers. The agreement is also strategically important for raw materials and related products. Mercosur countries supply several inputs relevant to EU industry, including lithium, natural graphite, niobium, manganese, silicon metal, vanadium, and tantalum. By improving the trade and investment framework, the agreement is expected to strengthen supply chain security, reduce distortive measures, and support investment in local processing.
At the same time, the agreement includes protections for sensitive agricultural sectors. The EU has also adopted specific safeguard arrangements for agricultural products linked to the EU-Mercosur agreement framework.
The duty structure under the EU-Mercosur preference framework varies across HS chapters and includes both simple and more complex formats. Ad valorem duties apply across a broad range of chapters, including Chapters 01-13, 15-25, 27-29, 31-46, 50-79, and 81-96. Specific or per-unit duties also apply in certain chapters, including 01, 02, 04, 07, 08, 10-12, 15-17, 19, 21-23, 25, and 35, where duties may be calculated by weight, volume, number of pieces, or other quantity units.
Several chapters, including 01, 02, 04, 07, 08, 15, 17, 18, 19, 20, 21, and 22, also include compound "plus" duty structures combining a percentage-based duty with a fixed amount. In addition, certain processed agricultural products in Chapters 04, 17, 18, 19, 20, 21, 24, and 33 include an agricultural component, shown as EA or EAR. More complex tariff formulas also appear in Chapters 04, 07, 08, 17, 20-22, 24, 35, 37, 38, 57, and 91, including compound duties, alternative "greater of" or "lesser of" calculations, specific duties, and minimum or maximum duty limits.
Overall, the EU-Mercosur update shows that preferential tariff treatment is not limited to simple percentage reductions but may involve multiple duty calculation methods depending on the HS chapter and product classification. These preferential rates are linked to tariff preference U126, requiring a statement on origin under Article 3.16 of the EU-Mercosur Interim Trade Agreement.
Conclusion
The provisional application of the EU-Mercosur Interim Trade Agreement on May 1, 2026, is a major trade-policy development for businesses operating between the EU and Mercosur. The agreement is expected to improve market access across goods, services, procurement, investment, and raw materials, while also embedding updated commitments on climate, labour, and sustainable development. For many companies, the immediate priority will be to determine how quickly preferential tariff treatment can be used, what operational changes are required to support compliant claims, and how the agreement affects sourcing, market-entry, and supply-chain strategy going forward.
Recognizing the importance of these developments for our clients, the relevant updates are available in ONESOURCE Global Trade Content. Within the ONESOURCE Global Trade platform, clients can access preferential duty rates under the agreement, subject to the applicable scope and coverage.
For more information on how ONESOURCE Global Trade solutions can assist you in managing trade agreement compliance, customs requirements, and global trade content, contact your Account Manager or Customer Success Manager.