EU-Mercosur free trade deal accelerates thanks to iTA

It’s called iTA, but for once, Italy has nothing to do with it. The acronym stands for the Interim Trade Agreement, a tactical accord designed to fast-track the full launch of free trade between the European Union and the Mercosur bloc. In principle, the deal was approved several months ago, yet it still faces a difficult unanimous ratification by all 27 EU Member States. 

The Mercosur bloc comprises Argentina, Brazil, Paraguay, Uruguay, and Bolivia, joined by associate members Chile, Colombia, Ecuador, Peru, and Suriname. The free-trade area that emerges from this Euro–South American partnership would encompass nearly 800 million consumers and account for around 20 per cent of global GDP.  

If concluded, this economic giant could breathe new life into businesses across both continents, offering relief from the tariff barriers imposed by the U.S. under the Trump administration. 

The Interim Trade Agreement in a nutshell

At its core, the iTA aims to reduce or eliminate customs duties on over 90% of goods traded between the EU and Mercosur. For more sensitive sectors, implementation will be gradual, stretching over as much as 15 years. 

The agreement also increases export quotas for European industrial goods — cars, machinery, pharmaceuticals, wines, and cheeses — as well as for South American agri-food products such as beef, poultry, sugar and ethanol, within specific limits and safeguards. 

In particularly delicate sectors like beef and poultry, “early warning” systems will monitor trade flows and market impact. 

Sustainability 

Driven by pressure from France, Austria, and Ireland, the deal mandates  full compliance with the Paris Climate Agreement, alongside concrete commitments to combat deforestation, curb illegal agricultural practices, and promote green economy cooperation and supply-chain traceability. 

The reinforced provisions also reaffirm commitments to core ILO standards, including the elimination of child labour, the protection of union rights, and safeguarding worker safety.

Fast-track procedure

The iTA also introduces a simplified ratification process, requiring approval by a qualified majority in the EU Council — a move that reduces the risk of individual Member States wielding veto power as political leverage. 

The agreement could be provisionally applied as early as 2026. For Brussels, the priority is to deliver tangible gains for European trade and industry, mitigate the impact of U.S. tariffs, and sustain Mercosur’s engagement amid its deepening ties with alternative partners such as China. 

Beyond these immediate objectives, the initiative aims to set a precedent for a new generation of modular trade deals. These would allow commercial and operational provisions to advance independently, without being held hostage to political gridlock.