Bulldozer: the EU-Mercosur trade agreement provisionally enters into force

The European Union (EU) and the South American bloc Mercosur (Brazil, Argentina, Uruguay and Paraguay) are forming a huge new free trade area from Friday. A dedicated agreement provisionally entered into force at midnight, creating a market of around 720 million people, according to the European Commission. It aims to boost the exchange of goods and services by gradually removing trade barriers and tariffs.

The agreement creates one of the world's largest free trade areas. The EU and Mercosur account for 30% of global gross domestic product (GDP).

The agreement favours European exports of cars, wine and cheese, and facilitates access to Europe for South American beef, poultry, sugar, rice, honey and soybeans.

The agreement is provisional, pending review by the Court of Justice of the European Union. The European Parliament voted in January to refer it to the EU's highest court for review. All four Mercosur countries have already ratified the agreement.

Supporters of the agreement, such as Germany and Spain, see it as a necessary tool to offset losses from US tariffs and to reduce dependence on China for critical raw materials. Meanwhile, opponents, led by France, fear a surge in imports of cheap beef, sugar and poultry meat. This would increase pressure on local farmers, who have repeatedly protested against the agreement.