The European Union has taken a decisive step in its trade policy by proposing the adoption of two landmark agreements: the EU–Mercosur Partnership Agreement and the EU–Mexico Modernised Global Agreement. In its press release of 2 September 2025 (IP/25/1644), the European Commission presented these deals as a major advance in the EU’s strategy to diversify trade relations and strengthen ties with key global partners. While the agreements cover a wide range of sectors — from agriculture to critical raw materials — their potential impact on the automotive industry stands out as particularly significant.
Mexico, already a key pillar of the USMCA and a major hub for vehicle production in North America, is now positioned to deepen its trade ties with the EU. This integration strengthens Mexico’s role as a bridge between the United States and Europe, reinforcing supply chains and improving competitiveness across the Atlantic.
Mercosur brings additional weight to the equation. Argentina’s established vehicle industry and Brazil’s status as one of the world’s top ten automotive producers give the region strong industrial foundations. Aiming to build real connections between North American and South American industries, it becomes essential to resolve the trade situation between the United States and Brazil.
At the same time, it is worth noting that Mercosur and Mexico already maintain free trade agreements in the automotive sector. This growing interconnectivity between regions and countries — the EU, Mexico, Mercosur, and the United States — will be decisive for strengthening supply chains and opening new opportunities for industrial cooperation that extend far beyond tariff reductions.
These new agreements come in parallel with the EU’s ongoing negotiations with the United States. Taken together, they could pave the way for a more comprehensive trade framework across the western hemisphere — one that stimulates vehicle production, aligns rules of origin, and strengthens the industrial bridges between North America, South America, and Europe.
For the American automotive sector, these developments open a positive horizon. As Europe consolidates its trade ties with Mexico and Mercosur, the U.S. industry has the opportunity to position itself at the center of this emerging trade fabric. Competitiveness in the automotive industry will increasingly benefit from deeper transatlantic and hemispheric integration — a step that could reinforce long-term leadership for the U.S. in the global automotive landscape.