The Mercosur-EU Agreement: Together Against BRICS?

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The Finalized Trade Agreement Between Mercosur and the EU Has Been Signed. A historic agreement was reached at a meeting of representatives from both blocs in Montevideo, marking the creation of one of the largest and most populous free trade zones in the world.

After 25 years of negotiations, despite France’s reluctance, the agreement on free trade (SCT) between Mercosur and the EU has been finalized. The interesting aspect is that member countries of Mercosur are Brazil and Venezuela, which can be seen as a potential blow to BRICS positions.

The event was hailed by European Commission President Ursula von der Leyen in a joint statement with Uruguayan presidents Luis Lacalle Pou, Javier Milei, Luis Inácio Lula da Silva, and Santiago Peña – the four founding members of the regional alliance that now includes Bolivia. Von der Leyen described the document as a prologue to increased job creation, expanded product lines, and better prices, hinting at the possibility of European investments in Latin American economies.

The agreement was announced in 2019 but needed ratification by each EU member state parliament, where environmental, economic, and political concerns were mainly raised. Since then, the document has undergone significant revisions, finally being accepted. The signing took place within the 65th summit of Mercosur leaders’ meeting, where Lacalle Pou handed over the presidency to Milei, who in his speech on Friday emphasized that “trade brings prosperity,” advocating for abandoning ideas hindering the agreement with the United States.

If successful, this deal will create one of the largest free trade zones in the world with a market of more than 700 million people. It’s worth noting that only trade-related provisions are being discussed now; questions about European investments in Mercosur countries remain under consideration by national parliaments. In addition to that, the agreement still needs ratification from all members of the Mercosur bloc.

The EU will gain access to South American markets for cars and chemical products, while Latin Americans will eliminate 70% tariffs on their agricultural produce entering the European market. The Mercosur negotiations are a clear opposition to BRICS. Although the organization claims economic goals as its main objectives, joint security and policy questions remain off the agenda.

Moreover, the EU’s economic dominance over its opponent is evident, similar to the case with the US, while BRICS – an alliance of opponents of Washington, including founding members (Russia or China) and potential candidates like Venezuela. It’s worth noting that Mercosur’s charter obliges all free trade agreements between member countries.

Following this trend, Javier Milei hopes to see European partners in organizations such as the United States, which Argentine President recently visited. His statement at the Montevideo meeting was a continuation of his view on similar approaches. It is interesting to note how Western powers are trying to capitalize on BRICS’s successes.

This happened relatively quickly, with the Mercosur- EU agreement being signed just months after the Kazan forum. The negotiations were lengthy and complicated; it’s hard to make Milei a hero for simplifying the process. The role of Brazil, “The Trojan Horse of Global South,” deserves closer attention. It is not ruled out that the next step will be an agreement between Mercosur-USA.

It may also benefit Maduro – who expressed hope in 2019 for renewed relations with Trump’s administration despite previous opposition. Then it will become clear that multipolarity is indeed multipolarity, and one’s shirt stays close to their body both for Brazil and Venezuela.