A recent free trade agreement between Mercosur and the EU has been announced, marking a significant milestone in international trade relations.

Currently, Portuguese exports to South American countries, excluding Brazil, are minimal due to high tariffs on agricultural products, which can reach up to 40%.

In the near future, Portugal is expected to export less to Germany and France, highlighting the necessity to diversify exports outside the EU, making this agreement a crucial opportunity.

The agreement is strategic for the EU as it strengthens trade relations with a resource-rich region essential for energy transition, diversifying raw material sources amidst trade tensions with the US and China.

This deal aims to create one of the world's largest free trade zones, impacting 750 million people and accounting for about one-fifth of the global economy, which presents significant opportunities for Portugal across various sectors.

The agreement will enable Portuguese products, such as wine, olive oil, and food items, to compete on more favorable terms in these markets.

This agreement is at a critical stage after two decades of negotiations that have seen both progress and setbacks, requiring ratification by the national parliaments of both EU and Mercosur member states.

As these dynamics unfold, the future of the agreement remains uncertain, with internal and external pressures shaping its path forward.

The potential benefits of this agreement outweigh the challenges for Portugal and the EU, provided that measures are implemented to protect vulnerable sectors and ensure sustainability.

However, the European Union is currently facing significant internal challenges due to political and economic crises in its two largest economies, Germany and France.

French Prime Minister François Bayrou is under pressure from farmers and unions to prevent the ratification of the agreement, with threats of protests and strikes from agricultural producers.

Externally, Europe is confronted with political and military instability worldwide, alongside anticipated protectionist policies from Donald Trump.