President of the European Commission, Urusla von der Leyen has said that the majority vote in favour the EU Mercosur Trade Agreement at EU Council level today (Friday, January) send a strong signal that the EU is serious about its priorities.

Just five member states out the of the EU-27 voted against the deal, namely Ireland, France, Poland, Austria and Hungary, while Belgium abstained.

The EU Mercosur Trade Agreement would eliminate tariffs on 91% of all products exported between the two regions.

Von der Leyen stated that the votes send a strong signal "on our commitment to Europe’s competitiveness and creating growth and opportunities for businesses and citizens".

"Just three weeks ago in the context of the European Council, we assured our Mercosur partners that we would travel to see them and together we would make history.

"In that time, we have worked hard with our member states and our stakeholders to deliver. Today, that hard work has paid off and I welcome the decision by the Council so we can move forward," she added.

The EU president outlined that she will sign the landmark deal soon under the Paraguayan presidency, which has just begun.

Mercosur deal

Von der Leyen has stressed that the European Commission has delivered what she describes as a "substantive and mutually beneficial deal, which will increase prosperity and create incredible opportunities".

"Europe’s perseverance and dedication to deliver on our priorities and uphold our commitments is clear.

"At a time when trade and dependencies are being weaponised and the dangerous, transactional nature of the reality we live in becomes increasingly stark, this historic trade deal is further proof that Europe charts its own course and stands as a reliable partner," she added.

The commission boss said that 60,000 European companies export to Mercosur, half of which are small and medium-sized enterprises which will benefit from lower tariffs, saving around €4 billion every year in export duties and should also benefit from simpler customs procedures.

"Crucially, it will also give our companies better access to critical raw materials," von der Leyen continued.

"We are also stepping up our actions in relation to import controls, because rules must be respected, also by importers."

She has argued that the deal will create more business opportunities, and will drive European investment in strategic sectors.

EU exports to Mercosur are expected to grow by almost €50 billion by 2040 and Mercosur exports will in turn grow by up to €9 billion.

What next?

The agreement will require the consent of the European Parliament before it can be formally concluded by the council. Ratification by all EU member states will also be required for the EU-Mercosur Partnership Agreement (EMPA) to enter into force.

According to the council, the EMPA brings together political dialogue, cooperation and comprehensive sectoral engagement under a single framework.

It also includes a trade and investment pillar, which will become fully applicable once the agreement is concluded and enters into force.

These provisions are aimed at strengthening cooperation in areas such as sustainable development, environment and climate action, digital transformation, human rights, mobility, counter-terrorism and crisis management.

The political dialogue provisions then aim to foster closer coordination on global challenges such as climate change, peacekeeping and migration.

Under the decision adopted today, the EU will sign the agreement and apply large parts of the political and cooperation chapters on a provisional basis, pending completion of the ratification procedures.

Following today’s decisions, the EU and its Mercosur partners will proceed with the signature of the agreements. Before the agreements can be formally concluded, the European Parliament will have to give its consent.

The EMPA will fully enter into force once all EU member states and Mercosur parties have completed ratification, if that happens.