European Union member states voted to sign the long-awaited trade agreement with the Mercosur bloc on 9 January 2026. The decision, reached by a qualified majority, clears the way for a deal that has been under negotiation for 25 years. The Council adopted two decisions authorising the signature of the broad Partnership Agreement and a specific Interim Trade Agreement.

The agreement creates a trade zone covering nearly 700 million people and aims to remove high customs barriers for European manufacturers.

Key provisions include the elimination of import duties on chemicals, which currently reach up to 18% in Mercosur countries. The deal also targets the automotive sector by removing tariffs on passenger cars, which currently stand at 35%, as well as duties on car parts ranging from 14% to 18%. Additionally, the agreement is expected to improve access to South American feedstock, which is crucial for the EU's green transition and battery value chains.

The European Chemical Industry Council, which consistently advocated for the deal throughout the negotiations, views the agreement as vital for the sector's future. In statements leading up to the vote, Cefic described the pact as a ‘unique and urgent opportunity’ to diversify supply chains and secure a competitive edge against global rivals. Similarly, the European Automobile Manufacturers’ Association welcomed the vote, stating it would strengthen the industry's resilience by lowering export costs and securing critical raw materials.

Despite the approval, the vote exposed significant divisions within the EU. A blocking minority formed by France, Poland, Austria, Ireland and Hungary voted against the measure, citing concerns over agricultural competition, while Belgium abstained.