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.

On Tuesday, 25 and Wednesday, 26 November 2025, AmCham EU travelled to the European Parliament in Strasbourg, France. Over the two-day programme, the delegation met with nearly a dozen MEPs and advisors for an exchange on the future of EU trade policy. Discussions centred on the importance of transatlantic cooperation, the ratification of the EU-Mercosur agreement and the implementation of the EU-US Framework Agreement. Members underlined the need for an ambitious EU trade agenda that ensures market access, reduces tariff and non-tariff barriers and strengthens the resilience of European industry. The delegation also called for a swift adoption of the Commission’s proposal on tariff reduction on US industrial goods and reiterated the importance of a pragmatic, forward-looking transatlantic agenda that promotes predictability and economic security.

European policymakers are increasingly focused on strengthening the EU’s strategic autonomy, reducing strategic dependencies and building greater resilience across critical sectors. This drive is rooted in legitimate concerns about ensuring access to essential goods, increasing the diversity of supply chains and enhancing the EU’s ability to respond to geopolitical and economic challenges. As the EU seeks to address these challenges, its core objective should be to leverage its extensive partnerships and use smart incentives to support the bloc’s long-term competitiveness and security.

Lawmakers are actively considering ways that ‘Made in Europe’ criteria could support these objectives in virtually any process requiring clearance, approval or an auction. Global examples of domestic preference and non-price criteria demonstrate two things. First, if they are designed poorly, they could reduce competitiveness, simplification and resilience. However, they also demonstrate that if they are designed well, they can maximise the value of allies’ economic participation and improve the functioning of the processes they are applied to.

The US’s various ‘Buy America’ programmes provide a useful case study for assessing the risks of different ‘Made in Europe’ regimes. While US procurement and funding programmes with ‘Buy America’ provisions are generally open to foreign-headquartered participants (and actively encourage their participation), they also bring certain categories of risk that should be considered before bringing them to the EU.

If ‘Made in Europe’ effectively excludes firms headquartered in the US and other allied nations, including EU-based subsidiaries of US-headquartered firms, the EU risks introducing more complexity into European public procurement markets and funding programmes. This would ultimately diminish competition and the quality of products and services, while increasing costs and elevating trade tensions that may decreasing the market access of EU-headquartered companies abroad. At a time when the EU is facing urgent competitiveness challenges, policymakers should avoid pursing reactive security and resilience policies that would undermine the EU’s competitiveness goals.

However, if thoughtfully implemented, certain ‘Made in Europe’ regimes could leverage the EU’s Single Market and international partnerships to improve the EU’s competitiveness and resilience.

Implementation of the EU–US Framework Agreement is essential to bring greater stability to transatlantic trade and investment. With the Commission’s tariff reduction proposals now before the European Parliament and the Council of the EU, swift adoption is critical to help businesses plan ahead. The co-legislators should therefore: 1) stick to the agreed scope, 2) avoid unnecessary duplication and 3) focus on restoring predictability for businesses. Following these principles will ensure the EU and the US can continue building on the Agreement while preventing a tit-for-tat that would harm both sides.

Twenty-six European business associations, including AmCham EU, call for the swift ratification of the EU-Mercosur Partnership Agreement. Representing €153 billion in trade and €380 billion in investment, the deal has the potential to strengthen EU competitiveness, diversify supply chains and promote sustainable growth. With the deal potentially adding €77.6 billion to the EU’s GDP by 2040, EU institutions must avoid delays and work on a timely ratification that will boost market access, support secure trade and benefit over 750 million people across both regions. Learn more in the joint business statement. 

At the POLITICO Competitive Europe Summit, Malte Lohan, CEO, AmCham EU reiterated the need for swift implementation of the EU-US Framework Agreement and renewed its call for greater simplification of EU rules. Mr Lohan expressed cautious support for the deal, noting its role in avoiding damaging escalation and restoring a degree of predictability. He also underscored the importance of reducing regulatory burdens, highlighting simplification as a strategic priority for competitiveness. With the priority now on timely tariff reductions, regulatory cooperation and simplification, find out how our members see the deal evolving. 

Mr Lohan was joined by Matthias Jørgensen, Head of Unit, USA and Canada, Directorate-General for Trade, European Commission and Jovita Neliupšienė, EU Ambassador to the US