2. A Negotiation that Outlived Several Worlds

When negotiations were launched in 1999, the world economy was still broadly shaped by the optimism of post-Cold War globalization. The World Trade Organization was young, and the first wake-up call of the failed WTO Seattle Ministerial Conference was still some months away. The European Union was deepening and widening. Mercosur, created in 1991, was still regarded as one of the most promising integration projects in the Global South. The idea of an inter-regional agreement between Europe and South America was intellectually coherent, economically plausible, and politically ambitious – but the world changed several times before the agreement could be completed.

The early 2000s brought the gradual exhaustion of the first wave of open regionalism in Latin America. Mercosur became more defensive, more inward-looking, and increasingly constrained by divergent national development strategies. The EU, meanwhile, expanded eastward, absorbed new members, and redirected political attention towards establishing the Euro, enlargement, institutional reform, and neighborhood policy. The Doha Round stalled. The 2008 financial crisis weakened confidence in globalization. Agricultural sensitivities persisted on both sides, and climate policies added complexity to international relations. Later came Brexit, the rise of China, the Trump administration’s challenge to the multilateral trading system, the COVID-19 pandemic, Russia’s invasion of Ukraine, supply-chain disruptions, and a new era of economic insecurity. Each of these moments changed the meaning of the agreement in ways that we discuss below.

In its early years, EU–Mercosur was primarily an inter-regional trade project. By the late 2010s, it had become a test of whether large trade agreements could still be concluded considering growing skepticism of many stakeholders.Footnote ² By the 2020s, it had become a geopolitical instrument. For the EU, the agreement was increasingly about maintaining a strategic presence in Latin America, diversifying partnerships, securing access to critical inputs, and demonstrating that rules-based trade could still deliver. For Mercosur, it was about escaping relative isolation, reducing dependence on a narrow group of markets, and proving that the bloc could still negotiate with major partners. This evolution helps explain why the agreement remained both attractive and elusive. It was never irrelevant, but its political meaning kept changing and each new context introduced new demands.

In 2019, after a long and complex process, and after a final bruising fight about agriculture market access, both sides announced a political agreement on the trade pillar. Yet that announcement did not translate into signature and implementation. Additional concerns emerged in the EU, particularly around accelerating deforestation, climate commitments, and the lack of credibility of sustainability enforcement. From the Mercosur side, these demands were often perceived as protectionist rear-guard battles and moving the goalposts after the game had already been played. From the European side, which was busy rolling out its ‘Green Deal’, they reflected the growing centrality of climate and environmental politics in trade policy.

The final stretch therefore required not only technical adjustment, but political re-legitimization. The December 2024 announcement in Montevideo should be understood against this background. The agreement that finally moved forward was not the product of a sudden elimination of conflict. It was the product of a new equilibrium, one in which both sides saw strategic value in final concessions and closure, even while domestic tensions remained unresolved.

3. Why the Agreement Did Not Close Earlier

From the outside, it is tempting to ask why it took so long. From the inside, the more accurate question is why it never collapsed altogether. Four factors repeatedly prevented closure.

The first was the asymmetry of offensive and defensive interests. Mercosur’s offensive interests were concentrated in agriculture and agro-industrial products such as beef, poultry, sugar, ethanol, rice, honey, citrus, and other products for which improved access to the European market mattered significantly. The EU’s offensive interests were broader and more diversified: industrial goods, cars and auto parts, machinery, chemicals, pharmaceuticals, services, public procurement, geographical indications, and regulatory disciplines. This created a classic negotiation imbalance. Mercosur wanted meaningful agricultural access in sectors that were politically sensitive in Europe. The EU wanted broad liberalization in areas that were politically sensitive for parts of Mercosur’s industrial base and public procurement systems.

The second factor was Mercosur itself. Mercosur is a customs union with incomplete internal coordination. Its members share a common external tariff, but their economic structures, political cycles, and trade strategies differ significantly. Brazil’s industrial sensitivities are not the same as Uruguay’s export priorities. Argentina’s macroeconomic and political cycles have often reshaped its external negotiating posture. Paraguay and Uruguay, as smaller economies, have tended to place greater emphasis on market access and external opening. Negotiating as a bloc therefore required constant internal management before external compromise could even be attempted. In addition, changes of governments in individual Mercosur countries often led to time consuming reassessment of the value (or not) of a possible deal that could affect the overall Mercosur position.

The third factor was domestic politics in the EU. Agriculture in Europe is never only agriculture: it is territory, identity, food security, social cohesion, and political symbolism. The volumes negotiated under the EU–Mercosur agreement were very limited and gradual, but the politics surrounding them were not. In several European debates, particularly in France and in other member states with strong agricultural constituencies, the agreement became a symbol of broader anxieties based on high input costs, regulatory asymmetry, environmental standards, rural decline, and the perceived vulnerability of the European model. These discussions completely ignored the agreement’s benefits for the very competitive EU agri-food exports, but also security of supply, which the agreement offered European farmers who needed inputs from Mercosur such as animal feed.

The European agricultural sector deserves particular attention because it shows that, in trade politics, size does not always matter as much as the type of production involved. From the Mercosur side, it was widely understood – although rarely stated openly at the negotiating table – that some segments of European agriculture faced structural difficulties in competing internationally. Small-scale, intensive, and often highly localized forms of production are not only economic activities, they are also part of a social and territorial model. But that same model can become a trap. Once production depends heavily on public support, the political economy enabling competition of reform becomes extremely difficult. The fact that in some EU member states, the political system favors the clout of rural areas and their voters over the metropolitan agglomerations, it becomes clear that taking on the agricultural sector for the greater economic good can be challenging for politicians vying for re-election.

For Mercosur, pushing for greater agricultural access was therefore about exporting more. It was also about exposing a deeper question, that is whether the EU could use the agreement as an opportunity to rethink productivity, scale, and competitiveness in parts of its agricultural sector. This was a highly sensitive issue. Mercosur negotiators had to send the message that the agreement could be an opportunity for the EU as well, but without pushing so hard that the agricultural chapter would become politically unmanageable and threaten the entire negotiation. In this sense, agriculture was not simply one sector among others, it was one of the central political fault lines of the agreement.

Lastly, the link of the trade agreement with environmental/climate commitments changed over time from being non-existent to being paramount. When the EU first requested insertion of a separate chapter on trade and sustainable development (mainly asking for respect and effective implementation of core labor standards and key multilateral environment agreements), Mercosur, for a long time rejected, this out of hand. The Mercosur argument amounted to insistence that international contractual rules regarding labor or environmental/climate commitments should stay and be respected (e.g. the ILO, or for climate, the Kyoto Protocol and later the Paris Agreement). Behind this reluctance was the concern that non-respect of these commitments could ultimately trigger the withdrawal of trade preferences by the EU. Where we ended is an Agreement with strong environmental/climate/deforestation commitments, including a new standard on ‘good faith implementation’ of the Paris Agreement. Here the delay in negotiations actually helped to allow a change on the Mercosur side: from ideological rejection to pragmatically embracing stronger commitments. But also, the EU remained pragmatic and agreed to address Mercosur concerns about environmental over-reach of its Green Deal legislation. For the first time the EU agreed to address claims that such legislation nullified the expected benefits of the Agreement.

These four factors interacted with time. Delay did not make the negotiation easier; it made it harder. Each year without closure introduced new political constraints or additional requests. New regulatory agendas emerged. New governments arrived. New crises changed priorities. New stakeholders demanded guarantees. The more the agreement was postponed, the more visible it became; and the more visible it became, the more actors sought to shape, criticize, condition, or redefine it. That was not necessarily negative. Broader scrutiny can improve agreements. But in this case, it also meant that the negotiation became increasingly exposed to new demands that had not been present when the original balance was designed.

One practical lesson from a hands-on point of view is that trade negotiations do not freeze in time. ‘Timing is everything – as the old negotiators saying goes – proved again to be true. A concession that is politically possible in one moment may become impossible later, but also vice versa. A package that balances interests today may become obsolete tomorrow. The EU–Mercosur negotiation shows that the cost of delay was not only in lost trade, but in the erosion of the political conditions that made earlier bargains possible.

4. Geo-Economics Uncertainty as a Catalyst

If the agreement was so difficult, why did it finally move forward? The answer is not that the old problems disappeared. European agricultural sensitivities remained. Mercosur’s internal coordination problems also remained. Indeed, one of the clearest examples of Mercosur’s persistent internal difficulties is that, even after the agreement had been concluded and ratified, one of the bloc’s main challenges, which is still unresolved, is the internal distribution of tariff-rate quotas among its members. The agreement moved toward implementation without Mercosur having fully settled how several quota-based export opportunities would be allocated among its own countries. Likewise, agricultural sensitivities in the EU have not been overcome. It took the first-ever qualified majority vote in the European Council for a major trade agreement to be adopted and for the powerful member states, France and Poland, to be overruled.Hitherto a consensus on trade had always been possible in the Council. Also, due to procrastination in the European Parliament to vote on its final ratification step, on the 1 May 2026 the EU Commission took the unprecedented step to apply the agreement provisionally.

Sustainability debates also remained as did concerns about competitiveness, regulatory asymmetry, and implementation. It was not the disappearance of these problems, but the international context in which they were evaluated. This may be an uncomfortable but realistic lesson from a hands-on point of view, but sometimes the context for conclusion matters more than the negotiation itself. Also the context led both sides to believe that the cost of non-agreement was going up fast, and final concessions and bold domestic decisions were needed to close the deal.

The world of the 2020s made strategic diversification more valuable. Europe faced war on its continent, energy insecurity, technological competition, and a more contested relationship with China and the United States. Latin America faced the risk of marginalization in the fragmented global economy. Both regions had an interest in demonstrating that inter-regional cooperation of like-minded partners could still produce concrete outcomes, above all a predictable, rules based, open environment for economic operators from both sides.

In this sense, the agreement was closed not so much because of Mercosur’s internal maturity but because of the pressure of the international environment. This distinction is important. It would be analytically misleading to claim that Mercosur suddenly overcame all its structural limitations. The bloc still faces deep challenges such as low internal trade, limited productive integration, recurrent protectionist pressures, and persistent difficulties in coordinating external strategy. However, because the world had become more uncertain, the value of having a major agreement with the EU increased.

For the EU, the agreement also became a test of credibility. For years, the EU’s external trade identity had been framed through notions of normative power, regulatory power, or market power. Yet, in a context of hardening geopolitical competition, those descriptions were no longer sufficient. The central question became whether the EU could translate its regulatory reach and strategic ambitions into concrete diplomatic outcomes. If it could not conclude an agreement with Mercosur after more than two decades of negotiations, what would that say about its capacity to act as a geopolitical trade power? The EU–Mercosur agreement therefore became part of a broader test: whether Europe could move from rule-setting ambition to strategic delivery.Footnote ³

This is where International Political Economy needs to adapt.Footnote ⁴ Traditional models often treat uncertainty as a constraint, as something that makes cooperation harder by increasing information problems, distributional fears, or domestic resistance. The EU–Mercosur case shows a different possibility. Under certain conditions, uncertainty can also become a catalyst. It can raise the opportunity cost of inaction. It can reorder political priorities. It can make an imperfect agreement preferable to indefinite negotiation.

This does not mean that uncertainty automatically produces cooperation. Often, it produces protectionism. But the EU–Mercosur case shows that when geopolitical uncertainty interacts with long-standing economic complementarity and institutionalized (and trusted) negotiation channels, it can generate momentum for closure.

5. The Architecture of Compromise: ITA and EMPA, and the Are Final Steps Still Ahead

Is the story over? Not quite. One of the most important features of the final legal architecture is the split between the Interim Trade Agreement (ITA) and the broader EU–Mercosur Partnership Agreement (EMPA). This architecture is not merely legal engineering. It is political risk management.

The EMPA provides the broader association framework, covering political dialogue, development cooperation, trade, and investment protection, including areas in which the EU cannot act alone because competences are shared with its Member States. As a result, the EMPA must be ratified by each EU Member State, a process that can be politically complex and may take years.

The ITA covers the trade and investment liberalization provisions that fall within the EU’s exclusive trade competence. For this reason, it can move more quickly through the EU institutional process: Member States participate through their vote in the Council of Ministers, but national parliaments in the EU are not involved.

This separation between the EMPA and the ITA reflects lessons from EU external relations law, especially the post-Singapore clarification of competences. However, in practical negotiating terms, it also reflects a political reality. If every component of a broad modern agreement had to wait for every national ratification process before any commercial benefit could materialize, the agreement would risk remaining politically vulnerable for years. Even worse, at the time of writing it seems that some national parliaments in the EU are opposing broad EMPA style agreements with a trade pillar despite an obvious track record of the positive effects of the provisional application of said agreement (France’s opposition to the EU–Canada Agreement CETA is a case in point). Although never tested, a final vote against an EMPA style broad Agreement in one national parliament would also end the provisional application of that Agreement including its trade part. EU Trade policy could be paralyzed forever if the subject of EU exclusive competence (trade commitments) were to continue to be subject to 27 member states ratifications.

The ITA is therefore a bridge between signature and application of the trade commitments, and of their entry into force. It allows the trade pillar to begin producing effects while the broader association agreement continues its institutional path. It also creates a crucial political dynamic in which businesses, exporters, importers, customs authorities, and regulators begin operating under the agreement, and the debate changes. The agreement ceases to be an abstract threat and becomes an empirical reality.

This matters especially for a politically sensitive agreement. The best way to reduce fear is often not another explanatory note, but implementation without disruption. The experience of CETA is relevant here, although the sequence is different. In the EU–Canada case, provisional application of the whole broad agreement was the traditional practical and mechanical solution that ensured swift application of the trade part without having to wait for the last member state to ratify. This model no longer works, as demonstrated by the unexpected ratification difficulties which surfaced, including opposition linked to investor–state dispute settlement and the Walloon blockage which also held up the full ratification of the EU–Central America and EU Peru/Colombia Agreements for 10 years.

In EU–Mercosur, by contrast, provisional application appears to reflect a form of institutional learning: ratification difficulties are anticipated rather than discovered late in the process. If the ITA operates provisionally and does not produce the catastrophic scenarios predicted by its opponents, the political space for final approval may improve. In that sense, provisional application is not a procedural detail. It is part of a strategy of political stabilization. CETA supports this point. Since its provisional application began in 2017, most of the agreement has applied even though full entry into force still requires approval by all EU Member States. Resistance to CETA has largely faded across the EU, with France remaining a notable exception, while the practical benefits of years of application have become harder to ignore.

At the same time, the word ‘provisional’ should not be overlooked. Even if the agreement begins to operate, it has not yet received its final institutional seal on the European side. The agreement remains under review by the Court of Justice of the European Union, and its opinion, based on previous cases, may not be issued before one and two years. Pending that opinion, and before the European Parliament gives its final consent, the agreement can begin to operate because the Council has enabled provisional application within the limits of EU competences. This is why the agreement is now implemented, but only provisionally.

Several final steps therefore remain. On the EU side, the Court of Justice must deliver its opinion; the European Parliament must then consider the agreement for final consent; and, in the case of the EMPA, national ratification procedures in the member states will still be required. On the Mercosur side, the four national parliaments have already ratified the agreement, but the bloc still needs to complete essential implementation tasks, particularly the internal allocation and administration of tariff-rate quotas.

For those who have been involved in this negotiation, this provisional phase may prove politically decisive. If, during the period between provisional application and final ratification, both regions begin to experience the concrete potential of the agreement, the future parliamentary debates in the EU may take place in a different atmosphere. Evidence of actual benefits, rather than speculative fears, can help reduce political tensions. In practice, implementation may become the best argument for ratification.

From the Mercosur side, however, provisional application also creates a challenge. To some extent, this is also true for the EU operators, in particular SMEs: preferential access is only useful if firms are prepared to use it. Rules of origin, certification, customs procedures, sanitary requirements, quota administration, and regulatory compliance will determine whether the agreement becomes an opportunity or a missed chance.

This is why the EU and the Mercosur side now need to pragmatically and urgently help implementation along. The EU has experience on how to do that, which it should share. Potential exporters and importers on both sides must be made aware of the new opportunities. Red tape bottlenecks need to be identified and mitigated in the spirit of the trade facilitation chapter. Investment opportunities need to be identified, tested for viability, and be supported by EU and Mercosur support programs. Governments can never do this alone; stakeholders such as chambers of commerce, industry and agricultural organizations must be brought on board.

Implementation is therefore not the epilogue of negotiation. It is the next ‘negotiation’, but this time not between the EU and Mercosur across a formal table but between the treaty text and domestic capacity.

6. Agriculture, Theory, and Geopolitics: What the EU–Mercosur Case Teaches from a Hands-on _Point of View

No part of the EU–Mercosur negotiation better illustrates the politics of managing domestic sensitivities than agriculture. From a purely quantitative perspective, the agreement’s agricultural concessions are limited and gradual, especially when measured against the size of both regional blocs. Sensitive products are managed through quotas, transition periods, and safeguard mechanisms. Yet the political debate around them has been intense. This is because, in trade politics, volume does not always determine political importance (this is indeed a key learning ‘from a hands-on point of view’). A small quota can carry large symbolic weight when it is associated with identity, territory, rural livelihoods, or perceptions of unfair competition in a sector already under pressure.

For many European farmers, Mercosur is often imagined not as a group of differentiated countries with diverse production structures, but as a large agricultural competitor operating under different cost and regulatory conditions. For Mercosur exporters, Europe is often viewed as a high-value market protected by layers of tariffs, standards, administrative requirements, and political sensitivities. Both perceptions contain elements of truth, but both are incomplete.

The safeguard debate reflects this tension. EU institutions introduced additional monitoring and response mechanisms for sensitive agricultural products, partly to reassure member states and farm constituencies that the agreement would not leave them politically exposed. This is not unique to EU–Mercosur. Similar dynamics have appeared in earlier EU trade negotiations, including the EU–South Korea agreement, where post-negotiation safeguards and duty-drawback concerns became part of the political management of domestic resistance after critical calls from the European Parliament.Footnote ⁵ In EU–Mercosur, however, the balance is especially delicate. From the Mercosur perspective, safeguards must remain consistent with the negotiated text and must not become discretionary instruments of protection. Too little reassurance can make ratification politically impossible; too much unilateral flexibility can undermine trust in the bargain. The task of trade diplomacy is therefore to design mechanisms that are strong enough to be politically credible but disciplined enough to preserve the commercial value and legal predictability of the agreement.

This is also why the narrative of ‘winners and losers’ is too simple. Some sectors in Mercosur will gain immediate opportunities, while others will face greater competition. Some EU sectors will expand exports, while others will remain anxious about import competition. However, the real policy question is not whether all sectors benefit equally. They will not. The question is whether the agreement creates a framework in which adjustment, competitiveness, and diversification can be managed over time.

For a small country, such as Uruguay, this distinction is crucial. The agreement creates opportunities in sectors such as beef, rice, services, wood products, and other export areas, but it also exposes domestic sectors to competition and requires an internal agenda of competitiveness. It also opens an important triangular challenge that is sometimes overlooked when the negotiation is understood only as a bilateral exchange between two blocs. For Uruguay, the risk is not only the direct entry of EU products into its own market, but also the potential loss of market share in larger Mercosur markets, especially Brazil, as EU products enter the region under improved conditions. This triangular dimension is central when both sides are regional blocs rather than single states. The outcome of the negotiation is not only EU–Mercosur, but also intra-Mercosur. Indeed, one of the main concerns of Uruguay’s dairy sector is not primarily competition from EU products in Uruguay, but the possibility of losing market share in Brazil, a key regional destination, as new European dairy products enter that market with lower or no tariffs.

Similar dynamics play in the EU. Market penetration of Mercosur agricultural products in one member state can displace intra-EU trade of that product. Small as these effects can be, one policy response in the EU was to make sure that the additional safeguard implementation rules would look not only at the effect of imports on the whole EU market, but also at effects in one or more individual member state. In the bigger picture, the EU’s traditional tradeoff between interests of the industrial and services sectors to expand into foreign markets, paid for by offering its own agricultural markets, almost broke down. It did not matter that modest opening of 1%–2% of the EU market for Mercosur products agreed in the negotiations was very restrictive, and the potential opening of the Mercosur market(s) held much more substantial promise for EU operators. It did not matter that the agricultural playing field was already tilted towards EU operators due to the subsidies of the EU Common Agricultural Policies. Economic rationale disappeared. Only the strategic and political imperative to conclude the agreement led the majority of the EU countries, for the first time, to override the concerns of the agricultural sector.

Trade agreements do not substitute for domestic reform. They reveal where reform is urgent. This is now one of the central challenges for all parties, but especially for Mercosur countries that will need to start working on how to transform preferential access into competitiveness, investment, scale, and productive upgrading.

This point also exposes the limits of some conventional approaches to trade theory. Neo-classical trade theory often begins with welfare gains from liberalization. Political economy adds distributional conflict. Two-level games add the interaction between domestic ratification and international bargaining. Institutionalism adds rules, procedures, and credibility. All these perspectives help explain parts of the EU–Mercosur case, but from a hands-on point of view, several additional elements stand out.

First, timing and sequencing matters more than models often assume. Many technical solutions are only possible if introduced at the right political moment. A proposal can be reasonable and still fail if the domestic environment is not ready to absorb it. Conversely, a compromise that once seemed impossible can become viable when external circumstances or pressure changes political incentives.

Second, ambiguity can be productive. Negotiators often seek precision, and legal certainty is essential. But large agreements also require carefully managed ambiguity, especially when bridging different regulatory cultures and political systems. The example of a new ‘good faith’ standard for the implementation of the Paris Agreement is a case in point. The aim is not to hide disagreement, but to create terminologies or institutional procedures through which disagreement can be managed without reopening the entire bargain.

Third, personal trust matters, and the EU–Mercosur negotiations benefited from long-term interactions between some of its leading negotiators. Trade negotiations are conducted by institutions, but they are advanced by people. Long negotiations build memory. They also build fatigue. Trust among negotiators cannot eliminate domestic constraints, but it can prevent misunderstandings, preserve channels during political crises, and identify landing zones when formal positions remain far apart. These elements are difficult to quantify, yet they often determine whether an agreement survives.

The EU–Mercosur case also challenges another common assumption in the literature: that domestic interest groups are relatively stable actors with fixed preferences. Much of the political economy of trade has modeled interest groups as organized constituencies with identifiable and relatively consistent preferences over protection, liberalization, or market access. Classic political-economy models of trade often treat domestic interests as relatively identifiable and stable actors whose preferences derive from sectoral exposure, factor endowments, or lobbying capacity.Footnote ⁶ Over a 25-year negotiation, however, this assumption becomes harder to sustain because sectors change, firms disappear, new industries emerge, environmental politics evolve, public procurement systems are reformed, digital trade becomes relevant, and supply-chain resilience becomes strategic. The domestic coalitions surrounding an agreement are therefore not simply ‘given’ at the start of negotiations, they are reshaped by time, institutional change, and the shifting meaning of trade itself. In other words, the EU–Mercosur case suggests that, in very long negotiations, these domestic coalitions may evolve substantially over time, requiring greater attention to preference formation and change rather than just preference aggregation.

The agreement also belongs to broader transformation in trade diplomacy. The language of trade is increasingly the language of resilience, strategic autonomy, supply-chain security, climate alignment, and geopolitical presence. This does not mean that tariffs no longer matter. They do. Market access remains central. Quotas, rules of origin, customs procedures, and public procurement commitments still shape commercial outcomes, but these instruments now operate within a larger strategic frame. For example, a considerable proportion of the last stretch of the negotiations focused on access to raw materials and disciplines on export duties for these materials.

For the EU, the agreement is part of a response to a world in which economic interdependence can become a vulnerability. Diversifying partnerships is not just a commercial objective, it is a geopolitical necessity. For Mercosur, the agreement is a way to avoid being trapped between great-power competition and regional stagnation. It offers a channel to engage with Europe, not as a recipient of preferences but as a negotiating counterpart.

This geopolitical dimension helped bring the agreement to conclusion, but it also creates expectations that trade agreements alone cannot satisfy – an agreement can open doors, but it cannot automatically create productive capacity, infrastructure, innovation, or regulatory efficiency. These require domestic and regional policy.

In Mercosur, the agreement should therefore be seen as both an external achievement and an internal stress test. It will test the bloc’s capacity to administer quotas, coordinate positions, support exporters, respond to safeguards, and develop regional value chains. If Mercosur treats the agreement as the end of a diplomatic process, it will under use it. If it treats it as the beginning of a competitiveness agenda, it may become transformative.

For the EU, the agreement will test whether it can reconcile its geopolitical ambitions with its regulatory and domestic political constraints. The EU cannot ask partners to align strategically while making closer, rules-based cooperation politically impossible. Nor can it ignore legitimate domestic concerns. The challenge is to make openness credible, enforceable, and politically sustainable.

7. Conclusions and Lessons from the EU–Mercosur Case

Several lessons emerge from the EU–Mercosur experience, both for practitioners of trade diplomacy and for the International Political Economy literature in general.

The first lesson is that time is not neutral. Delaying a trade agreement does not preserve the status quo. It changes the agreement’s political economy. In the EU–Mercosur case, delay reduced the quality of some concessions, increased regulatory complexity, and exposed the agreement to new waves of political pressures. A deal that might have been quite easy to conclude in one political moment could become much harder in the next.

The second lesson is that technical closure is not political closure. The 2019 political agreement did not settle the matter. Sustainability concerns, legal architecture, domestic opposition, and geopolitical shifts from 2019 onward continued to reshape the process and, given the turbulent beginning of this decade, even more than before. Negotiators must therefore think beyond the moment of announcement. An agreement must be designed not only to be concluded, but to survive the politics of signature, ratification, provisional application, and implementation.

The third lesson is that domestic preparation should be part of negotiation. Too often, countries invest enormous energy in obtaining market access and insufficient energy in preparing firms to use it. For Mercosur, the implementation phase will require information systems, sectoral strategies, customs readiness, origin certification capacity, quota administration, and public–private coordination. Without this, preferences remain theoretical. The agreement may open doors, but domestic capacity determines whether firms can walk through them.

The fourth lesson is that geopolitical narratives can help close agreements, but they cannot replace distributive management. Strategic arguments were essential to the final momentum of EU–Mercosur, but farmers, industrial firms, workers, SMEs, consumers, and regional value chains still experience agreements through concrete costs and benefits. Successful implementation requires translating geopolitics into sectoral policy.

The fifth lesson is that International Political Economy nowadays needs to take uncertainty more seriously as an independent variable. The EU–Mercosur agreement was shaped by uncertainty at every stage: uncertainty about global markets, political cycles, regulatory agendas, climate commitments, supply chains, and institutional credibility. Uncertainty did not simply obstruct cooperation. It altered preferences, changed political costs, and eventually made agreement more valuable.

The agreement is historic not because it solves every problem between the two regions. It does not. It is historic because it shows that large-scale trade diplomacy remains possible in a fragmented world. However, its meaning should not be misunderstood. Its conclusion does not prove that Mercosur has fully overcome its internal weaknesses. Nor does it prove that the EU has resolved the tension between openness and domestic protection. Rather, it shows that under certain geopolitical conditions, actors may choose an imperfect but strategic agreement over the risks of indefinite drift.

For those of us who have seen parts of this process from the inside, the most important lesson is humility. Trade negotiations are not linear exercises in economic rationality. They are political processes conducted by real people through legal texts, technical schedules, domestic constraints, and human judgment. They require patience, but also timing. They require ambition, but also realism.

For International Political Economy, the EU–Mercosur case complements existing debates on preferential trade agreements. The point is not that the literature has overlooked the broader functions of PTAs beyond tariff liberalization. Important work has already shown that trade agreements can operate as instruments of institutional design, credible commitment, regulatory cooperation, diffusion, and strategic statecraft, including Mansfield and Milner’s (Reference Mansfield and Milner2012) work on the political economy of PTAs, Dür, Baccini, and Elsig’s (Reference Dür, Baccini and Elsig2014) analysis of the design and depth of trade agreements, and Meunier and Nicolaidis’s (Reference Meunier and Nicolaïdis2019) discussion of the EU as a conflicted trade power. Building on this literature, the EU–Mercosur case highlights how, in a period of geopolitical uncertainty, supply-chain disruption, climate politics, and renewed strategic competition, trade agreements can also function as mechanisms for managing uncertainty. They may help states and regions signal credibility, diversify partnerships, reinforce resilience, and preserve strategic relevance when the wider international environment becomes less predictable.

The EU–Mercosur agreement took more than 25 years because the world kept changing around it. It finally moved forward because the world changed enough to make agreement necessary. That may be the central lesson from a hands-on point of view.