The Colonial Pact Fulfills Its Timeless Role: An Analysis of the Mercosur-EU Agreement

The reshaping of international trade relations has been marked by strategic disputes over markets, resources, and geopolitical influence. Amid energy crises, shifts in production patterns, and pressure to find new economic partners, multilateral agreements are once again playing a central role in redefining global trade

Originally published in the Le Monde Diplomatique

By Laura Ludovico

After 26 years, the trade agreement between Mercosur and the European Union enters priority status and is provisionally approved. The document establishes the tariff conditions and access conditions for South American products to the European market. It is observed that, in a single document, the mark of the identity of a relationship that intertwines both sides is reflected: for Mercosur, it demonstrates the result of patient waiting and inaugurates a new phase of institutional capacity; for the European Union, it represents the timeless fulfillment of a colonial pact.

Since 2022, Europe has faced the impact of the regional reconfiguration caused by the Russian-Ukrainian war, especially due to the rupture of the continent's heavy energy dependence on Russian gas. The conflict highlighted a nearly structural fragility: the centralization of imports of vital supplies. Thus, the region was imposed with the urgency of readjusting commercial and political allies. And it did so, in the European style of foreign policy.

The European Trade Strategy Directed at Global South Countries

To avoid the worsening of the systemic crisis spreading across the region, from 2024 onwards, the European Union began to massively advance numerous agreements that had remained in a state of latency for years, especially those signed with Global South countries. The plan resumes a classic performance: it is observed that the document will, in fact, adopt the nomenclature of "commercial ally," but this also harks back to the modern European caravels when they spot land on the horizon.

Among the nine agreements considered strategic, six involve Asian countries, two Latin American ones, and one other economic bloc. Despite regional and sectoral differences, the negotiations share a common trait: long periods of stagnation followed by concentrated resumptions between 2024 and 2025. The agreement with Malaysia is illustrative of this behavior. Initiated in 2010, suspended in 2012, and reactivated only in 2025, it covers sensitive sectors such as medicines, metals, food products, intellectual property, and mining. A similar situation is observed in the Chilean case: although in force since 2003, the agreement was "modernized" in 2023 through the near-total elimination of tariffs on European products and the strengthening of copyright safeguards.

And now, the agreement with Mercosur takes center stage. In a brief recap: negotiations were initiated in 1999 and only in 2026 is the treaty properly signed. In the meantime, discussions on the clauses were suspended twice: in the 2000s, due to criteria in the agricultural sector, and in the 2010s, regarding environmental guidelines. This reveals that the impasses were not overcome but managed through concessions by the South American bloc. When the agreement finally advances, it does so under a scenario in which European urgencies overlap with the historical asymmetries of the relationship, transforming old obstacles into negotiable clauses.

Credit: Ricardo Stuckert/PR

An Analysis of the Content of the Conditions

The purpose of the agreement is to inaugurate a free trade zone covering approximately 700 million consumers. To this end, the main sectors to be mobilized are industry and agribusiness in the region.

In the agricultural field, the agreement explicitly, almost didactically, states the asymmetries that sustain it. Although the European Union has announced the opening of its market, this liberalization comes with unilateral safeguards that preserve sectors considered sensitive to the bloc. It is an escape route.

The mechanism authorizes the temporary reintroduction of tariffs whenever imports exceed previously defined limits or when prices practiced fall below the European market. In practice, this is a conditional liberalization, in which access is granted but permanently monitored, and whose interruption depends exclusively on the European assessment of risks to its productive chain.

A brief X-ray of Mercosur's extra-bloc trade reinforces that the agreement with the European Union does not take place in an economic vacuum but within a dynamic already marked by structural imbalances. In 2024, the bloc's trade flow with the rest of the world reached approximately 694.8 billion dollars, with exports representing 57% and imports 43%. Although China figures as the main destination for Mercosur's exports (26%), the European Union occupies the second position, absorbing about 15% of the bloc's external sales, ahead of the United States. This flow, however, is deeply concentrated: Brazil accounts for more than 80% of extra-bloc trade, showing that Mercosur's international insertion is, to a large extent, mediated by the Brazilian economy.

The bloc's exports to the European market totaled 57.7 billion dollars, while imports from the EU reached 60.5 billion, generating a trade deficit of 2.8 billion dollars for Mercosur. It is not, therefore, a balanced relationship, but an exchange in which added value flows mostly from Europe to South America.

It is in this context that agricultural safeguards and tariff reintroduction mechanisms assume political centrality. While Mercosur expands the opening of its market to European industrialized products, the European Union preserves instruments to contain imports considered sensitive, especially in the agricultural sector. Liberalization, thus, occurs selectively: full when it favors European industrial expansion; conditional when it threatens its internal sectors. The agreement reaffirms an international division of labor that associates the South with the export of commodities and the North with the production of high-value-added goods.

Criticism is not restricted to the South axis. European farmers have reacted to the agreement on the grounds that competition with Mercosur products occurs under asymmetric conditions, given the difference in labor and environmental costs. The paradox is evident: the European Union, at the same time that it presents itself as the guardian of high standards of social and environmental protection, internalizes the discourse of risk to justify safeguards, but externalizes the social costs of the agreement, both for European producers and for South American workers.

This design contrasts with the rhetoric of mutual gain. While the European Commission projects an increase of up to 15 billion euros in the bloc's GDP, driven by privileged access to the markets of Brazil, Argentina, Paraguay, and Uruguay, Mercosur commits to reducing tariffs broadly and structurally, including for higher-value-added European industrialized products. The result is a trade flow that tends to reinforce South American primary specialization, while at the same time expanding the presence of European manufactured goods, deepening a historically unequal productive division.

The Timelessness of the Colonial Pact

Colonialism in Latin America was founded on European expansionist violence, narrated under the myth of the savage who needed to be civilized by their "discoverers." This logic guided the invasion, territorial occupation, and systematic expulsion of indigenous peoples from their lands. The European civilizing method did not conceive of nation projects or fair exchange relations, but organized the region as a productive gear destined to supply the metropolis's priorities—a large private warehouse at the service of external interests.

Decades later, when analyzing the agreement between Mercosur and the European Union, the colonial pact no longer manifests itself through direct coercion or explicit violence. This form would be incompatible with the progressive and social welfare discourse that structures contemporary European political identity. The logic now operates through consent: the sovereign state is expected to accept as rational and inevitable a destiny aligned with the guidelines of European foreign policy. While Mercosur celebrates the signing as an institutional and diplomatic milestone, the European Union does not hide its commercial triumph, operating with pragmatism and clarity of interests.

Thus, a narrative imposed on the former European colonies persists: that their natural place in the international system is one of productive subordination. This reductionist ideology, however, should not be understood as destiny, but as a political challenge. Recognizing asymmetries does not mean accepting them. It implies, rather, questioning who depends on whom, repositioning purchasing and selling power, and disputing real protagonism in the international market. The colonial pact, even if updated in language and instruments, only sustains itself as long as it is naturalized.

Laura Ludovico is a lawyer, Director of Projects and Research at the BRICS Tech Forum.