Julieta Zelicovich Mercosur and the Mercosur-European Union Agreement In December 2024, negotiations between Mercosur and the European Union reached a new milestone with a politi­cal-diplomatic agreement on the trade pillar of the Associ­ation Agreement. 1 The new agreement introduces a series of amendments to the 2019“agreement in principle”, which reflect the geopolitical, environmental and social transfor­mations that have taken place all over the world in the last five years. The new version incorporates an annexe to the chapter on sustainable development and introduces changes regarding government procurement, tariffs on electric and hydro­gen-powered vehicles, export tariffs, and the volume of pork and biodiesel quotas allocated to Paraguay, among other things. It also provides for the creation of a mecha­nism to rebalance concessions and the implementation of a review clause. This document analyses the effects of the agreement on the regional dynamics of Mercosur. In particular, it assesses the trade agreement´s impact on Mercosur in terms of its density as an integrated economic space and its role as a coordination mechanism for joint action by its members in the international system. Two aspects need to be clarified: The analysis we present starts from the assumption that the agreement will enter into force simultaneously in the four Mercosur member countries, and does not consider partial bilateral entry into force—between some Mercosur members and the Eu­ropean Union—which would generate broad centrifugal effects. 2 Second, we would like to mention that the analy­sis is based on documents published by the European Commission in December 2024, which are not the final version of the treaty and are not binding. At the time of writing this report, the parties were working on the legal review process(legal scrubbing) of the treaty. 1  The Association Agreement consists of two pillars: the trade pillar and the political cooperation pillar. Negotiations on the latter were concluded in July 2020. Unlike the trade pillar, the text of the agreement has not been published. 2  To date, the chapter on institutional design of the agreement has not been published. However, the information that has transpired indicates that it would provide for the separate entry into force in each Mercosur member, as is the case with other Mercosur free trade agreements. This scenario would generate substantial trade diversion effects on the functioning of the bloc and erode regional cohesion. Mercosur and the Mercosur-European Union Agreement 1