Remarks by High Reprensentative/Vice-President Kallas and Commissioner Šefčovič on the EU-Mercosur Partnership Agreement and the modernised EU-Mexico global agreement

High Representative/Vice-President Kallas:

Good afternoon. 

Before updating you on the college meeting, I would like to quickly mention the ongoing work we do on Ukraine. We also had the Security College talking about this. We have the Defence Ministers from the Coalition of the Willing meeting virtually today to discuss our support for Ukraine. 

It is clear that Russia shows no real wish to end this war. We have seen, last night, strikes on Ukraine again. We need to address the consequences of this. For Europe, this can only mean one thing: more military, diplomatic and economic support for Ukraine. In the event of a truce, a strong Ukrainian military is the strongest security guarantee there is. That is why we are also supporting them with training, funding and equipment.  

While Western leaders gather in diplomacy, an autocratic alliance is seeking a fast track to a new world order. Looking at President Xi standing alongside the leaders of Russia, Iran, and North Korea in Beijing today. These are not just anti-Western optics; this is a direct challenge to the international system built on rules. And it is not just symbolic: Russias war in Ukraine is being sustained by Chinese support. These are realities that Europe needs to confront. 

Now, on the College meeting.  

The Commission put forward proposals today for new deals with Mercosur and Mexico. Mercosur will be the EUs biggest trade deal to date - a free trade area with 700 million customers. This is a key trade pact and a strategic step for European global influence.  

With Mexico, we are revitalising one of our longest standing trade partnerships to boost economic growth and competitiveness on both sides.  

Europe is strengthening existing alliances and creating new relations where all involved will benefit. The economic case for these deals is self-evident. They will create billions of euros worth of export opportunities, contribute to economic growth and support hundreds of thousands of European jobs.  

But these agreements go beyond trade. They are an example of the EUs fundamental commitment to build alliances that protect both sides. We are reinforcing the EUs global partnerships to boost resilience, defend shared values and uphold the rules-based international order.   

Second, on EU-United States trade.  

The EU and the U.S. sealed a deal in July. Commissioner Šefčovič spent many hours negotiating with his US counterparts, during this mandate. It is clear that the deal ensures stability in the worlds largest trading partnership, provides predictability for our companies and strengthens transatlantic relations.  Today, the College discussed the next steps in the implementation. Of course, Commissioner Šefčovič will update you on the details in a minute.  

Finally, the College today also approved the final elements of the EUs long-term budget, including those related to the Single Market, nuclear safety and justice.  

To recall, our proposed budget for the period between 2028 to 2034 is worth €2 trillion. It will protect European citizens, strengthen the European social model and make the European industry stronger. As part of the budget, weve proposed a ten-fold increase in funding in military mobility, and a five-fold increase in defence investment. As with every budget, we can expect very tough negotiations, we know from the previous years it has been quite intensive, but it is in everyones interest we get this over the line. 

Thank you from my side.  

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Commissioner Šefčovič:

 Good afternoon from me as well.

It is indeed a pleasure to stand here today, as this marks an important moment – not only for the European Unions trade policy but for our broader economic future.

The EU-Mercosur Partnership Agreement, alongside the modernised EU-Mexico Global Agreement, are not just trade agreements – they are strategic instruments that will help shape Europes role in the global economy for decades to come.

These deals are not just about numbers, although the numbers are compelling.

The EU-Mercosur Agreement will create the worlds largest free trade area, linking over 700 million consumers across two continents. It offers first-mover advantages to EU companies in a region still largely protected by high tariffs. A few examples:

• Today:
  • bilateral trade is worth €112 billion
  • over 30-thousands European SMEs export to the Mercosur countries
  • and the EU is the largest investor there, with investments totalling €384 billion.
• Thanks to this deal, however:
  • we expect savings of over €4 billion per year in customs duties for our exporters
  • EU exports are projected to rise by 39 percent, amounting to some €50 billion
  • and overall, a projected GDP gain of €77.6 billion for the EU by 2040.

From automotive and machinery to wine, chocolate, and olive oil, EU products will gain privileged access to a new market. Tariffs as high as 35 percent will be eliminated or reduced, while we are also securing better access to critical minerals.

Moreover, we are strengthening the protection of European heritage. The agreement will safeguard 344 EU geographical indications, making it one of the most ambitious deals ever for the protection of European food and drink names abroad.

And yes, we know there are concerns – especially from our farmers – and I want to reassure everyone that we have heard them.

That is why we negotiated calibrated quotas, gradual market opening and strong safeguards. And should market disruptions occur, the proposed 6.3-billion Unity Safety Net under the next Multiannual Financial Framework stands ready to support the agricultural sector.

In addition, the Commission is proposing to supplement the agreement with a legal act to operationalise the bilateral safeguard mechanism in our agreement with Mercosur.

We are not reopening the text of the agreement – this is a unilateral instrument that will set out in detail how we intend to activate the safeguard mechanism, if necessary.

So, we will work on this basis with Member States to address their specific concerns in the context of the ratification process.

Turning to the conclusion of the modernised EU-Mexico Global Agreement: this too represents a major leap forward.

Mexico is our second-largest trading partner in Latin America, and this modernisation is essential – not only for economic growth, but for strategic resilience.

We are securing better access to critical raw materials, opening up opportunities in public procurement and digital services, and eliminating nearly all tariffs on EU agri-food exports – a key advantage, as Mexico is a net importer of agricultural products from the EU.

With 567 EU geographical indications protected and €100 million in annual agri-food tariffs to be removed, this agreement also brings tangible benefits to our rural economies.

All in all, in todays uncertain geopolitical climate, diversifying our supply chains and deepening partnerships with trusted allies is not a luxury – it is a necessity.

These agreements will anchor the EUs economic presence in Latin America – a presence that has been in decline. They will boost our competitiveness and contribute to a more stable and predictable global trade environment.

So once again, this is about more than just numbers.

The EUs extensive network of free trade agreements – the largest in the world – is a strategic asset for maintaining our global economic edge.

That is why we continue to push forward on other key agreements, like with the United Arab Emirates. Later this month, I will also travel to India, Indonesia, Malaysia, while also visiting Viet Nam where we must improve the implementation of our five-year-old agreement.

Let me conclude with another critical point. Last week, we took an important first step in implementing the EU-US Joint Statement of August 21.

As outlined in that statement, this was necessary to secure the reduction of tariffs on cars and car parts to 15 percent, effective August 1 – something that directly impacts the global competitiveness of our automotive industry.

In addition, it was necessary to secure the carve-outs on generic pharmaceuticals, active ingredients, natural resources, and chemical precursors, effective from September 1. And this is just the first step: we will continue engaging with the US to obtain further exemptions.

Despite some commentary to the contrary, the EU-US agreement is the only responsible way forward. A trade – and political – escalation would have served no one, except our global strategic rivals. Is that the outcome we want?

The deal safeguards the immense scale of transatlantic trade, which accounts for some 20 percent of our total exports – driven by real companies, including thousands of SMEs, and supporting nearly five million European jobs.

These jobs are not – and should not be – negotiable.

Because in the end, this is what trade looks like: businesses, jobs, consumers, and competitiveness – all tied together.

Thank you.