In December 2024, the European Union (EU) and the Southern Common Market (Mercosur, i.e. Argentina, Bolivia, Brazil, Paraguay and Uruguay) concluded negotiations on an EU-Mercosur Partnership Agreement. The Agreement includes a Trade and Sustainable Development Chapter, as well as a Trade and Sustainable Development Annex. We have previously provided explanations on the sustainability aspects of the EU-Mercosur Partnership Agreement.

On 3 September 2025, the European Commission submitted the Partnership Agreement to the Council of the European Union (i.e., the EU’s Member States) by adopting proposals for Council decisions on the signing and on the conclusion of the Agreement. This formally started the EU’s ratification of the text.

Importantly, the Partnership Agreement is a so-called “mixed agreement”, meaning that some of its provisions go beyond the EU’s exclusive competences. As a result, two parallel legal instruments are being adopted by the EU.

On the one hand, an EU-Mercosur Interim Trade Agreement (ITA) covering areas of exclusive EU competence only is being adopted at EU level, without the involvement of national legislatures. The ITA will enter into force when it is signed and concluded by the Council by a qualified majority, following consent by the European Parliament.

The rest of the Partnership Agreement, including the Trade and Sustainable Development Chapter and the Trade and Sustainable Development Annex, will only enter into force later, after all EU Member States will have ratified the agreement according to their domestic ratification procedures.

As such, while the Partnership Agreement’s trade liberalization provisions may enter into force relatively soon, sustainability provisions will likely only start applying later. Mixed agreements have taken considerable time to be ratified by all EU Member States in the past, meaning that the full entry into force of the Partnership Agreement, including sustainability provisions, may only occur in the distant future.

The Partnership Agreement is likely to have a considerable impact on business. Trade liberalization and facilitation provisions mean that opportunities will arise on both sides of the Atlantic. Provisions relating to sustainable development also mean that there will be regulatory consequences. Starting today, companies may wish to start identifying how they may benefit from the content of the Agreement, particularly in relation to the ITA. Simultaneously, concerned European and South American companies will also want to start anticipating how the Agreement will affect their operations, including from a sustainability perspective.