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The European Council’s decision to postpone its vote on concluding the EU-Mercosur free trade agreement (FTA) is a missed strategic opportunity that threatens the EU’s credibility as a reliable partner. After more than 20 years of negotiations, the EU is once again delaying one of its most ambitious and strategic trade agreements.

The EU-Mercosur FTA’s economic benefits are clear. At a time when strengthening competitiveness, economic growth and partnerships should be paramount, the FTA provides access to a market of 284 million consumers – reducing tariff and non-tariff barriers and supporting integrated supply chains.

Beyond its economic benefits, the EU-Mercosur FTA is also an important geopolitical tool. It would anchor a long-term strategic partnership with a key region and reinforce the EU’s role as a credible advocate of rules-based trade. Amid heightened geopolitical rivalry, postponement weakens the EU’s standing and its ability to conclude ambitious FTAs elsewhere.

The EU cannot afford further delays. The EU-Mercosur FTA is vital for the region’s competitiveness, resilience and global credibility. The European Council must promptly return to this file and conclude this FTA in January.

The European Commission’s Environmental Omnibus proposal is a positive first step towards reducing the administrative and regulatory burdens on businesses operating in the EU. Key measures such as streamlining permitting, simplifying industrial emissions reporting, removing the SCIP database and easing Extended Producer Responsibility schemes would help create more efficient and harmonised processes across the EU. Additionally, the proposal’s indication of upcoming work on the Circular Economy Act and the swift implementation of the Packaging and Packaging Waste Regulation would further support a simplified regulatory environment.

By improving efficiency and predictability, the proposal would help foster a stable, investment-driven market in Europe and reinforce the case for sustainable practices. To fully deliver on the potential to reduce burdens for business, co-legislators must now move the Environmental Omnibus across the finish line. AmCham EU stands ready to serve as a resource in their efforts. These simplification initiatives in environmental regulation are crucial to maintaining Europe’s global standing as a hub for business and innovation. 

The Environmental Omnibus proposal is part of the Commission’s simplification agenda and follows its proposed Chemicals Omnibus, which introduced related environmental simplifications in July 2025. These important initiatives continue to drive efforts to cut red tape, reduce regulatory burdens and enhance the EU’s competitiveness.

The Omnibus I political agreement announced yesterday broadly eases the sustainability compliance and due diligence burden for businesses under the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD), giving much-needed certainty to businesses. It is a significant achievement for the EU’s simplification agenda and ongoing efforts to reduce the regulatory burden. Specifically, the flexibility introduced in terms of the risk-based approach and how companies need to define adverse impacts will alleviate most of the excessive burden that existed under the original CSDDD. The revised transposition timeline of CSDDD to 2029 will also give all parties the necessary time to prepare for implementation.  

However, it appears that EU policymakers did not yet sufficiently tackle how these rules apply to the global activities of companies and groups – for example, by limiting the scope of the CSDDD to only those products and services with a logical link to the EU. This is a missed opportunity with far-reaching consequences that keeps legal uncertainty in place for global firms and their supply chains.  This oversight on extraterritorial impact will make the CSDDD more difficult for policymakers to implement and monitor and risks creating confusing overlap with other jurisdictions’ rules. 

The EU must use the next steps in the policy-making process – including implementing measures, guidance and future reviews – to fix outstanding challenges in both the CSDDD and the CSRD. In particular, clearer rules on when and how EU legislation impacts global business activities would give companies the predictability they need to invest and support sustainability investments.