Source: EURLEX
Language: en
Format: md

**Council of the**
**European Union**
**Brussels, 3 September 2025**
**(OR. en)**

**12487/25**

**Interinstitutional File:**

**2025/0184 (NLE)**

**POLCOM 219**

**SERVICES 52**

**FDI 47**

**COLAC 142**

**PROPOSAL**

From: Secretary-General of the European Commission, signed by Ms Martine
DEPREZ, Director

date of receipt: 3 September 2025

To: Ms Thérèse BLANCHET, Secretary-General of the Council of the
European Union

No. Cion doc.: COM(2025) 339 final

Subject: Proposal for a COUNCIL DECISION on the conclusion, on behalf of the
European Union, of the Interim Agreement on Trade between the
European Union, of the one part, and the Common Market of the South,
the Argentine Republic, the Federative Republic of Brazil, the Republic
of Paraguay and the Oriental Republic of Uruguay, of the other part

Delegations will find attached document COM(2025) 339 final.

Encl.: COM(2025) 339 final

12487/25

## COMPET.3 EN

EUROPEAN

COMMISSION

Brussels, 3.9.2025
COM(2025) 339 final

2025/0184 (NLE)

Proposal for a

**COUNCIL DECISION**

**on the conclusion, on behalf of the European Union, of the Interim Agreement on Trade**
**between the European Union, of the one part, and the Common Market of the South, the**

**Argentine Republic, the Federative Republic of Brazil, the Republic of Paraguay and**

**the Oriental Republic of Uruguay, of the other part**

# **EN EN**

**EXPLANATORY MEMORANDUM**

**1.** **CONTEXT** **OF** **THE** **PROPOSAL**

**•** **Reasons for and objectives of the proposal**

The attached proposal constitutes the legal instrument for authorising the conclusion of the
Interim Agreement on Trade between the European Union, and the Common Market of the
South, the Argentine Republic, the Federative Republic of Brazil, the Republic of Paraguay
and the Oriental Republic of Uruguay (hereinafter referred to as 'the ITA').

The attached proposal also constitutes the legal instrument for authorising the provisional
application of the ITA between, on the one part, the Union and, on the other part, one or more
of the Signatory MERCOSUR States, in accordance with Article 23.3 of the Agreement,
pending the completion of the procedures necessary for its entry into force. The ITA will fully
enter into force following the completion of the necessary internal procedures by, on the one
part, the Union and, on the other part, MERCOSUR and the four Signatory MERCOSUR
States. The ITA provides for the possibility of provisional application of the whole ITA
between the Union and one or more of the Signatory MERCOSUR States, in order to allow
the Union and that or those Signatory MERCOSUR States that have completed their
respective internal procedures to benefit from the Agreement as soon as they are ready,
without having to wait for completion of internal procedures by all the Parties.

The proposed Council decision includes the authorisation of provisional application as part of
the Council decision authorising the conclusion of the ITA. Unlike other cases of provisional
application of international agreements, in the case of ITA the purpose of provisional
application is not to allow the Parties to provisionally apply parts of an agreement pending the
completion of necessary internal procedures within the Union; rather, it is to allow the
provisional application of the whole ITA where the Union has completed its internal
procedures for entry into force of the ITA (i.e. both the Council and the Parliament will have
considered the agreement and given their agreement), but where, at that time, only some (but
not all) Signatory MERCOSUR States have done the same. In this context, it is more
appropriate to include the proposal to authorise the provisional application of the ITA
between the Union and one or more of the Signatory MERCOSUR States in the proposed
Council decision on the conclusion of the ITA, rather than in the Council decision on the
signature of that Agreement.

Mercosur [1] is the world’s fifth largest economy outside of the EU in terms of GDP
(EUR 2.9 trillion in 2023), and the EU's eleventh largest trading partner. It is an important
market, with a population of over 270 million inhabitants and large untapped potential for
trade and investment. The EU is the first major economy to reach a comprehensive trade
agreement with Mercosur, which will give EU exporters, service providers and investors an
important first mover advantage in this region. The ITA will strengthen ties between likeminded, reliable partners, and reflects both sides’ commitment to open, sustainable and rulesbased trade, countering protectionism. It will create an ambitious and comprehensive
framework for the trade relationship that will contribute to economic security and help facing
current global challenges.

1 The Common Market of the South (MERCOSUR for its Spanish initials) is a regional integration
process, initially established by Argentina, Brazil, Paraguay and Uruguay, and subsequently joined by
Venezuela (currently suspended) and Bolivia (in accession process). Only Argentina, Brazil, Paraguay
and Uruguay are parties to the EU-Mercosur Partnership Agreement.

# EN 1 EN

On 13 September 1999, the Council of the European Union authorised the European
Commission to open negotiations with Mercosur and adopted negotiating directives. The
negotiations were conducted in consultation with the Council Working Party on Latin
America and the Caribbean. The Trade Policy Committee was consulted on the trade-related
parts of the negotiations. The negotiation process took more than 25 years. The negotiation of
the trade related parts was initially politically concluded in June 2019 and of the political and
cooperation part in June 2020. During 2023 and 2024 the EU and Mercosur negotiated
additional elements, in particular the Annex to the Trade and Sustainable Development
Chapter, including reinforced commitments on deforestation as well as provisions granting
Mercosur more flexibility on some industrial policy related commitments (e.g. public
procurement). The EU and Mercosur and its members concluded the negotiation of the
Partnership Agreement between the European Union and its Member States, and the Common
Market of the South, the Argentine Republic, the Federative Republic of Brazil, the Republic
of Paraguay and the Oriental Republic of Uruguay (hereinafter referred to as the “EMPA”) on
6 December 2024 in Montevideo, Uruguay.

The negotiated texts relating to trade and investment liberalisation were published by the
Commission in August 2019 and in December 2024.

The negotiated outcome consists of two legal instruments:

1. the EMPA that will include a) the Political and Cooperation pillar and b) the Trade
pillar; and

2. the ITA covering trade and investment liberalisation.

The ITA was signed on …., at the same time as the EMPA. Pursuant to Article 23.2(1), the
ITA will enter into force on the first day of the month following the date on which the Parties
have notified each other in writing of the completion of their respective internal procedures
required for this purpose. The ITA will expire and be replaced by the EMPA upon the latter’s
entry into force, following its ratification.

**•** **Consistency with existing policy provisions in the policy area**

The ITA provides a comprehensive legal framework for EU-Mercosur trade and investment
relations. It will remain in force until the entry into force of the EU-Mercosur Partnership
Agreement.

The ITA will replace Title II of the Interregional Framework Cooperation Agreement between
the European Community and its Member States, and the Southern Common Market and its
Party States, signed in Madrid on 15 December 1995.

The ITA is fully in line with the overall EU vision for its partnership with Latin America and
the Caribbean, as outlined in the Joint Communication to the European Parliament and the
Council on a New Agenda for Relations between the EU and Latin America and the
Caribbean, adopted on 7 June 2023.

In addition, the ITA is in line with the “Trade Policy Review     - An Open, Sustainable and
Assertive Trade Policy” of February 2021 which anchors trade and investment policy to
European and universal standards and values, alongside core economic interests, putting a
greater emphasis on sustainable development, human rights, tax evasion, consumer
protection, and responsible and fair trade.

# EN 2 EN

**•** **Consistency with other Union policies**

The EU-Mercosur ITA is fully consistent with European Union policies and will not require
the EU to amend its rules, regulations or standards in any regulated area, e.g. technical rules
and product standards, sanitary or phytosanitary rules, regulations on food and safety, health
and safety standards, rules on GMOs, environmental protection or consumer protection.

The EU-Mercosur ITA also includes a chapter on Trade and Sustainable Development, which
links the Agreement to overall objectives of sustainable development and specific objectives
in the areas of labour, environment, and climate change.

Furthermore, the EU-Mercosur ITA safeguards public services and ensures that governments’
right to regulate in the public interest is fully preserved and constitutes a basic underlying
principle thereof.

**2.** **LEGAL** **BASIS,** **SUBSIDIARITY** **AND** **PROPORTIONALITY**

**•** **Legal basis**

The Commission presents the result of negotiations with Mercosur in the form of two selfstanding but linked agreements: the ITA and the EMPA.

In accordance with the Treaties and case law of the European Court of Justice, in particular its
Opinion 2/15 on the EU-Singapore Free Trade Agreement of 16 May 2017, all areas covered
by the ITA fall within the exclusive external competence of the European Union and, more
particularly, within the scope of Articles 91, 100(2) and 207 TFEU.

As a result, the ITA is to be concluded by the Union pursuant to a decision of the Council
based on Article 218(6) TFEU, following the European Parliament’s consent.

Article 218(7) TFEU enables the Council to authorise the Commission to approve on the
Union's behalf, modifications to the agreement, subject, as the case may be, to specific
conditions the Council may attach to such authorisation.

Provisional application of the Agreement between, on the one part, the Union and, on the
other part, one or more of the Signatory MERCOSUR States, in accordance with Article 23.3
of the ITA, is to be authorised pursuant to a decision of the Council based on Article 218(5)
TFEU.

**•** **Subsidiarity (for non-exclusive competence)**

The EU-Mercosur ITA, as presented to the Council, does not cover any matters that fall
outside the scope of the EU’s exclusive competence.

**•** **Proportionality**

Trade agreements are the appropriate means to govern market access and the related areas of
comprehensive economic relations with a third country outside the EU. No alternative means
exist to render such commitments and liberalisation efforts legally binding.

This initiative pursues directly the objectives of the Union's external action and contributes to
the political priority of 'EU as a stronger global actor’. It is in line with the EU Global
Strategy’s orientations to engage with other countries and to revamp its external partnerships
in a responsible way, in order to attain the EU's external priorities. It contributes to the EU’s
trade and development objectives. The proposal is in line with the EU Green Deal.

# EN 3 EN

Negotiations for the ITA with Mercosur were carried out in accordance with the negotiating
directives set out by the Council. The outcome of negotiations does not go beyond what is
necessary to achieve the policy objectives set out in the negotiating directives.

**•** **Choice of the instrument**

This proposal for a Council decision is submitted in accordance with paragraphs 5 and 6 of
Article 218 TFEU, which envisage the adoption by the Council of a decision authorising the
provisional application of international agreements and authorising the conclusion of
international agreements, respectively. There exists no other legal instrument that could be
used in order to achieve the objective expressed in this proposal.

**3.** **RESULTS** **OF** **EX-POST** **EVALUATIONS,** **STAKEHOLDER**
**CONSULTATIONS** **AND** **IMPACT** **ASSESSMENTS**

**•** **Stakeholder consultations**

During the negotiations with Mercosur, a Sustainability Impact Assessment (SIA) was
commissioned from an external contractor to study the potential economic, social and
environmental impact of the trade part of the agreement. The SIA fed into the negotiations
and informed the negotiators and Commission services. The final report was published on 29
March 2021.

In the framework of the SIA process, the contractor consulted widely internal and external
experts, organised public consultations and workshops, conducted online questionnaires and
held bilateral meetings and interviews with civil society both in Europe and in Mercosur.
Consultations in the framework of the SIA provided a valuable and effective platform for the
involvement of key stakeholders and civil society, which participated in significant numbers.

All along the negotiation process, including prior to and after each negotiation round, the
Commission informed and consulted EU Member States orally and in writing on the different
aspects of the negotiations via the Council’s Trade Policy Committee. The European
Parliament was also regularly informed and consulted via its Committee on International
Trade (INTA), and the EU-Mercosur Monitoring Group. Draft proposals as well as the texts
resulting from the negotiations were sent throughout the negotiation process to both
institutions. The Commission also organised number of meetings and contacts with civil
society (Civil Society Dialogues) to discuss progress and negotiating positions throughout the
negotiations.

**•** **Collection and use of expertise**

The _“Sustainability Impact Assessment in Support of the Association Agreement Negotiations_
_between the European Union and Mercosur”_ was carried out by the external contractor
London School of Economics Enterprise. The SIA provides an examination of the potential
economic, social, human rights and environmental impact of the trade agreement.

The “Economic Assessment of Negotiated Outcome” (the EANO) was carried out by
Commission services following the conclusion of the negotiations and reflecting their

outcome.

**•** **Impact assessment**

The SIA consists of two complementary components. First, a robust analysis of the economic,
social, human rights and environmental impacts, that the trade agreement under negotiation

# EN 4 EN

could have in the EU, in Mercosur countries and in other relevant countries. Second, a broad
consultation process involving stakeholders both in the EU and in Mercosur countries,
providing opportunities for information gathering and sharing, consultation and dissemination
of the results. The SIA provides valuable input to the process of designing possible flanking
and mitigating measures, including via proposals in the study.

The report employs the dynamic version of the GTAP Model to study the impacts of two
scenarios, one conservative and one more ambitious, with respect to the outcome of the
negotiations in terms of tariff and non-tariff measures reductions by both parties. In the
conservative scenario, GDP in the EU expands by 10.9 billion euro (0.1%) and in Mercosur
by 7.4 billion euro (0.3%) by 2032, in comparison to the modelling baseline without the FTA.
In the ambitious scenario, GDP in the EU expands by 15 billion euro and in Mercosur by
11.4 billion euro.

The EANO assesses the economic impact of the actual outcome of the negotiations. It is not
based on assumptions regarding the expected outcome of the agreement, contrary to the SIA.
The SIA assessed the impact of two scenarios- one conservative and one ambitious - with
respect to the outcome of the negotiations in terms of reductions of barriers to trade through
tariff and non-tariff measures. The EANO estimates the economic impact based on the actual
tariff and non-tariff measures concessions. It also takes into account the fact that the UK is no
longer in the EU. This explains the difference in the estimated impact of the agreement in the
EANO compared to the SIA. Furthermore, the EANO analysis is updated to include the most
recent developments in the EU’s trade policy.

**•** **Regulatory fitness and simplification**

The EU-Mercosur ITA is not subject to REFIT procedures. It nevertheless contains a
framework for simplified trade and investment procedures, reduced export and investment
related costs and will therefore increase trade and investment opportunities for small and
medium-sized enterprises in both markets. Among the expected benefits are increased
transparency, less burdensome technical rules, compliance requirements, customs procedures
and rules of origin, enhanced protection of intellectual property rights and geographical
indications, better access to government procurement tenders, as well as a special chapter to
help SMEs use the opportunities offered under the Agreement.

**•** **Fundamental rights**

The proposal does not affect the protection of fundamental rights in the Union.

**4.** **BUDGETARY** **IMPLICATIONS**

The ITA will have a financial impact on the EU budget on the side of the revenues. The ITA
will lead to an estimated loss of duties of EUR 330 million at the entry into force of the
Agreement. After the ITA is fully implemented on the EU side (after 15 years from its entry
into force) the yearly loss of duties is estimated to reach EUR 1 billion. This estimation is
based on a projection of the evolution of trade for the next 15 years without any agreement.
Indirect positive impacts are expected in terms of increases in resources linked to value added
tax and gross national income.

# EN 5 EN

**5.** **OTHER** **ELEMENTS**

**•** **Implementation plans and monitoring, evaluation and reporting arrangements**

The ITA includes institutional provisions that lay down an implementing bodies’ structure to
continuously monitor its implementation, operation and impact. This institutional framework
will be replaced by the one set up in the EMPA, upon its entry into force.

The institutional chapter of the ITA establishes the specific functions of the Trade Council
that will oversee the fulfilment of the objectives of the ITA and supervise its implementation
and of the Trade Committee that will assist the Trade Council in performance of its duties.

The Trade Committee will supervise the work of specialised Subcommittees and other bodies
established under the ITA.

**•** **Detailed explanation of the specific provisions of the proposal**

The ITA creates a coherent, comprehensive, up-to-date legally binding framework for the
EU's trade relations with Mercosur. It will foster trade and investment by contributing to the
expansion and diversification of economic and trade relations.

Through this agreement, the EU aims to provide the best possible conditions for its operators
on the Mercosur's market. The ITA goes beyond existing WTO commitments in many areas,
such as trade in goods, services, government procurement, non-tariff barriers and the
protection and enforcement of intellectual property rights, including geographical indications
(GIs). In all of these areas, Mercosur countries agreed to significant new commitments in
comparison to WTO terms. The ITA also contains advanced provisions on trade and
sustainable development, including a strong commitment on deforestation.

The agreement satisfies the criteria of Article XXIV GATT (to eliminate duties and other
restrictive regulations of commerce with respect to substantially all trade in goods between
the parties), as well as of Article V GATS, which provides for a similar test with respect to
services.

In line with the objectives set by the negotiating directives, the Commission notably secured:

(1) The full removal, over time, of duties on 91% of goods that EU companies export to
Mercosur. This will save over EUR 4 billion annually in duties. For example,
Mercosur countries will remove high duties on industrial products, such as cars
(35%), car parts (14 to 18%), machinery (14 to 20%), chemicals (up to 18%),
clothing (up to 35%), pharmaceuticals (up to 14%), leather shoes (up to 35%) or
textiles (up to 35%). The agreement will also progressively eliminate duties on EU
food and drink exports, such as wine (27%), chocolate (20%), spirits (20 to 35%),
biscuits (16 to 18%), canned peaches (55%) or soft drinks (20-35%). The agreement
will also provide duty-free access subject to quotas for EU dairy products (currently
28% tariff), notably for cheeses.

(2) A balanced market opening by the EU, as the agreement will eliminate import duties
on 92% of Mercosur goods exported to the EU. Sensitive agricultural products such
as beef, sugar or poultry are only given preferential treatment in limited quantities
via carefully calibrated tariff-rate quotas.

(3) For Argentina, Uruguay and Paraguay, the agreement fully dismantles, or binds at
zero, export taxes on raw materials and on industrial goods. It also reduces export

# EN 6 EN

taxes on agricultural goods (Argentina), or eliminates them (Uruguay, Paraguay and
Brazil). For industrial goods, Brazil has bound at zero important raw materials
needed for the EU’s economic diversification (nickel, copper, aluminium, steel raw
materials, steel, titanium). Brazil has maintained policy space to impose export duties
on certain raw materials, in such cases the EU has obtained preferences of at least
50% on any export tax introduced by Brazil in the future and a ceiling of 25%.

(4) A robust bilateral safeguard mechanism that allows the EU and Mercosur to impose
temporary measures to regulate imports in the event of an unexpected and significant
increase in imports, which causes, or threatens to cause, serious injury to their
domestic industry. These safeguards also apply to agricultural goods under the tariffrate quota regime or can be limited to the territory of EU outermost regions, where
relevant.

(5) The highest standards for food safety, animal and plant health continue to apply to all
products, irrespectively of whether they are produced domestically or imported into
the EU. The precautionary principle applies. The agreement provides for reinforced
cooperation with the authorities of the partner countries and faster flow of
information about any potential risks through a more direct and efficient information
and notification system.

(6) A comprehensive chapter on trade and sustainable development, which aims at
ensuring that trade supports environmental protection and social development. The
chapter covers issues such as sustainable management and conservation of forests,
respect for labour rights and promotion of responsible business conduct. . It also
includes specific dispute settlement provisions and a dedicated review mechanism.
The chapter also includes an explicit commitment to effectively implement the Paris
Agreement on Climate Change, which was also agreed to constitute an essential
element of the EMPA, therefore allowing a suspension of the ITA if a Party leaves
the Paris Agreement or stops being a party “in good faith”. An Annex to the TSD
Chapter contains commitments by the Parties to take measures to stop further
deforestation as of 2030. This is the first time that Parties to a trade agreement
subject to dispute settlement take an individual legal commitment to stop
deforestation. The Agreement also offers civil society organisations an active role to
monitor the implementation of the agreement, including any environmental concerns.

(7) New tendering opportunities for EU bidders with Mercosur countries, which are not
members of the WTO Agreement on Government Procurement. This is the first time
that Mercosur countries will open up their government procurement markets. EU
companies will be able to tender for contracts with public authorities, such as central
government ministries and other governmental and federal agencies, on an equal
footing with companies from Mercosur countries.

(8) The removal of technical and regulatory trade barriers to trade in goods, in particular
by promoting the use of first-party certification and convergence through the use of
international standards adopted by ISO, IEC, ITU and Codex Alimentarius, as well
as by other international standard setting organisations, in accordance with the
common definition agreed by the EU and Mercosur. There is an agreement to reduce
duplicative testing in the electronics sector in low-risk areas. There will also be a
specific Motor Vehicles Annex promoting UNECE Regulations and reducing
duplicative testing in the sector.

# EN 7 EN

(9) A comprehensive Annex with detailed provisions to facilitate trade in wine and
spirits, covering recognition of winemaking practices, certification and labelling, in
line with the most modern EU FTAs.

(10) The opening of services sectors and facilitation of trade in services between the EU
and Mercosur, both through local establishment and on a cross-border basis. The
agreement covers a wide range of services sectors, including business services,
financial services, telecommunications, maritime transport (for the first time
Mercosur is opening maritime transport within the region), postal and courier
services. It also includes commitments on establishment of enterprises, both in
services and non-services sectors. It will ensure a level-playing field between EU
service providers and their competitors in Mercosur. The ‘right to regulate’ in public
interest is fully preserved, at all levels of government. The agreement also contains
advanced provisions on the movement of professionals for business purposes, such
as managers or specialists that EU companies post to their subsidiaries in Mercosur

–
countries. There is also a substantive e-commerce chapter a novelty for the
Mercosur partners.

(11) A high level of protection and enforcement of intellectual property rights including
detailed provisions on copyright, trade secrets and enforcement providing for
improved protection.

(12) A high level of protection and enforcement for EU Geographical Indications (GIs),
comparable to that of the EU, for 344 EU names of quality food, wine and spirits
products.

(13) A chapter dedicated to SMEs to ensure that they fully benefit from the opportunities
offered by the FTA.

(14) Efficient dispute resolution mechanisms, either through panel arbitration or with the
help of a mediator. The dispute settlement chapter includes new provisions modelled
on the WTO non-violation complaint - if a party considers that a measure of the other
party nullifies or substantially impairs its benefits under the agreement, it can ask a
panel to rule on this question.

# EN 8 EN

2025/0184 (NLE)

Proposal for a

**COUNCIL DECISION**

**on the conclusion, on behalf of the European Union, of the Interim Agreement on Trade**
**between the European Union, of the one part, and the Common Market of the South, the**

**Argentine Republic, the Federative Republic of Brazil, the Republic of Paraguay and**

**the Oriental Republic of Uruguay, of the other part**

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular
Article 91(1), Article 100(2), and Article 207(4), first subparagraph, in conjunction with
Article 218(5), Article 218(6), second subparagraph, point (a), and Article 218(7) thereof,

Having regard to the proposal from the European Commission,

Having regard to the consent of the European Parliament [2],

Whereas:

(1) In accordance with Council Decision No [XX] [3], the Interim Agreement on Trade
between the European Union, of the one part, and the Common Market of the South
and the Argentine Republic, the Federative Republic of Brazil, the Republic of
Paraguay and the Oriental Republic of Uruguay, of the other part (hereinafter ‘the
Agreement’) was signed on [XX XXX 2025], subject to its conclusion at a later date.

(2) The Agreement should be applied on a provisional basis between, on the one part, the
Union and, on the other part, one or more of the Signatory MERCOSUR States, in
accordance with Article 23.3 of the Agreement, pending the completion of the
procedures necessary for its entry into force. The Union’s agreement to provisionally
apply the Agreement between the Union and one or more of the Signatory
MERCOSUR States in accordance with Article 23.3(2) of the Agreement should be
expressed together with the Union’s consent to be bound by the Agreement.

(3) The Agreement should be approved.

(4) Pursuant to Article 218(7) of the Treaty on the Functioning of the European Union, it
is appropriate to authorise the Commission to approve on the Union’s behalf certain
modifications to the Agreement by a body set up by the Agreement pursuant to Article
12.26 and subparagraph (f)(ii)(iv)(xvi) of Article 22.1(6) of the Agreement.

(5) The Agreement does not, in accordance with Article 23.7(1) thereof, within the Union,
confer rights or impose obligations on persons, other than those created between the
Parties under public international law,

2 OJ C,, p. .
3 [Reference to be inserted]

# EN 9 EN

HAS ADOPTED THIS DECISION:

_Article 1_

The Interim Agreement on Trade between the European Union, of the one part, and the
Common Market of the South and the Argentine Republic, the Federative Republic of Brazil,
the Republic of Paraguay and the Oriental Republic of Uruguay, of the other part (hereinafter
‘the Agreement’), is hereby approved. [ 4]

_Article 2_

Pending its entry into force, the Agreement shall be applied provisionally, between, on the
one part, the Union and, on the other part, one or more of the Signatory MERCOSUR States,
in accordance with Article 23.3 of the Agreement, as from the first day of the second month
following the date on which one or more Signatory MERCOSUR State or States, as the case
may be, have notified the Union of the completion of its or their respective internal
procedures necessary for the provisional application of the Agreement and confirm their
agreement to provisionally apply the Agreement. [5]

_Article 3_

For the purposes of Article 12.26 of the Agreement, any modification or rectification of
Annexes 12-A to 12-E to the Agreement shall be approved by the Commission on behalf of
the Union, following consultation of the Trade Policy Committee

_Article 4_

1. For the purposes of paragraph 6 of Article 2 of Annex 2-D and subparagraph (f)(ii)
of Article 22.1(6) of the Agreement, any amendment to Appendix 2-D-1 of Annex 2D to the Agreement shall be approved by the Commission on behalf of the Union,
following consultation of the Trade Policy Committee.

2. For the purposes of paragraph 4 of Article 5 of Annex 2-D and subparagraph (f)(iv)
of Article 22.1(6) of the Agreement, any amendment to Appendix 2-D-3 of Annex 2D to the Agreement shall be approved by the Commission on behalf of the Union,
following consultation of the Trade Policy Committee.

_Article 5_

For the purposes of Article 13.39 and subparagraph (f)(xii) of Article 22.1(6) of the
Agreement, any amendment to Annex 13-C to the Agreement shall be approved by the
Commission on behalf of the Union, following consultation of the Trade Policy Committee.

4 The text of the Agreement is published in OJ L, XXXXX…
5 The date from which the Agreement is to be provisionally applied between, on the one part, the Union
and, on the other part, one or more of the Signatory MERCOSUR States, shall be published in the
_Official Journal of the European Union_ by the General Secretariat of the Council.

# EN 10 EN

_Article 6_

This Decision shall enter into force on the day of its adoption [6] .

Done at Brussels,

_For the Council_

_The President_

6 The date of entry into force of the Agreement will be published in the _Official Journal of the European_
_Union_ by the General Secretariat of the Council.

# EN 11 EN

**LEGISLATIVE FINANCIAL STATEMENT ‘REVENUE’- FOR PROPOSALS**

**HAVING BUDGETARY IMPACT ON THE REVENUE SIDE OF THE BUDGET**

**1.** **NAME** **OF** **THE** **PROPOSAL:**

Proposal for a Council Decision on the conclusion, on behalf of the European Union,
of the Interim Agreement on Trade between the European Union, of the one part, and
the Common Market of the South and the Argentine Republic, the Federative
Republic of Brazil, the Republic of Paraguay and the Oriental Republic of Uruguay,
of the other part

**2.** **BUDGET** **LINES:**

Revenue line (Chapter/Article/Item): Chapter 12, Article 120

Amount budgeted for the year concerned (2025): EUR 21 082 004 566

_(only in case of assigned revenues):_

The revenues will be assigned to the following expenditure line
(Chapter/Article/Item):

**3.** **FINANCIAL** **IMPACT**

◻ Proposal has no financial implications

X Proposal has no financial impact on expenditure but has a financial impact on

revenue

◻ Proposal has a financial impact on assigned revenue

The effect is as follows:

_(EUR million to one decimal place)_

|Revenue line|Impact on revenue|12 months|Year 2026|
|---|---|---|---|
|Chapter 12/Article 120|_EUR 247.5 mn _|Entry into force expected<br>beginning 2026|0|
|Chapter 12/Article/120||||

|Situation following action|Col2|Col3|Col4|Col5|Col6|
|---|---|---|---|---|---|
|Revenue line|[N+15]|[N+16]|[N+17]|[N+18]|[N+19]|
|Chapter 12/Article 120|_EUR 1_<br>_billion_|_EUR 1_<br>_billion_|_EUR 1_<br>_billion_|_EUR 1_<br>_billion_|_EUR 1_<br>_billion_|
|Chapter/Article/Item…||||||

_(Only in case of assigned revenues, under the condition that the budget line is already_
_known):_

# EN 12 EN

|Expenditure line7|Year N|Year N+1|
|---|---|---|
|Chapter/Article/Item<br>…|||
|Chapter/Article/Item<br>…|||

|Expenditure line|[N+2]|[N+3]|[N+4]|[N+5]|
|---|---|---|---|---|
|Chapter/Article/Item<br>…|||||
|Chapter/Article/Item<br>…|||||

**4.** **ANTI-FRAUD** **MEASURES**

**5.** **OTHER** **REMARKS**

The proposed Decision does not incur additional costs (expenditure) in the EU
budget.

The ITA will have a financial impact on the EU budget on the side of the revenues.
The ITA will lead to an estimated loss of duties of EUR 247.5 million at the entry
into force of the Agreement. [8] After the ITA is fully implemented on the EU side
(after 15 years from its entry into force) the yearly loss of duties is estimated to reach
EUR 1 billion. This estimation is based on a projection of the evolution of trade for
the next 15 years without any agreement.

Indirect positive impacts are expected in terms of increases in resources linked to
value added tax and gross national income.

7 To be used only if necessary.
8 The estimated amount of revenue losses at EUR 247.5 mn is net of collection costs (a 25% has been
deducted from the estimated revenue loss of EUR 330 mn).

# EN 13 EN