The Trump-Milei Pact Pressures the EU
On 5 February 2026, the United States and Argentina signed the most expansive bilateral trade agreement ever concluded between the two countries. The New York Times called it a breakthrough. For the European Union, the urgency to finalise the Mercosur deal just increased.
President Javier Milei, who has pursued an open-market economic policy since taking office, found an ideological partner in the Trump administration. The US eliminated reciprocal tariffs on approximately 1,675 Argentine products, including raw materials and pharmaceuticals. Argentina opened its market to over 200 categories of American goods — chemicals, machinery, medical devices, and vehicles and dairy under government quotas.
The agreement also grants the US a 100,000-tonne preference for Argentine beef — directly competing with the 99,000-tonne tariff-rate quota the EU negotiated in the Mercosur deal.
Why this changes the equation
Until now, Mercosur countries negotiated primarily with the EU. Now they have an alternative — and a powerful one.
For Argentina, the US pact means:
- Access to the American market without waiting for European ratification
- Investment in Vaca Muerta (one of the world's largest shale gas reserves)
- Export revenue increase estimated at over $1 billion
For the EU, it signals:
- Latin America will not wait for European legal procedures to conclude
- China and the US are actively competing for the same markets
- Every month of delay in ratification has a real geopolitical cost
Threat to geographical indications
Article 2.5 of the US-Argentina agreement permits Argentina not to restrict US market access for products carrying names like 'Parmesan', 'Feta', 'Camembert', 'Brie', 'Emmental', 'Gorgonzola', and 'Gouda'. The Farmers' Journal confirmed this on 16 February 2026.
The problem: the EU-Mercosur agreement protects these same names as geographical indications. Article 13.35(1) of the treaty states:
'Each Party shall provide, according to its laws and regulations, the legal means for interested parties to prevent: (a) the use of a geographical indication of the other Party listed in Parts 1 and 2 of Annex 13-B [...] that does not originate in the country of origin specified in Annex 13-B for that geographical indication.'
Can Argentina simultaneously protect EU GIs (under the Mercosur deal) and allow the US to use the same names (under the Trump pact)? Article 13.35(1)(e) goes further — protection applies even when a GI is "used in translation or accompanied by expressions such as 'kind', 'type', 'style', 'imitation' or the like."
The bigger picture: three powers, one continent
Latin America has become the arena for competition between three major blocs:
| Player | What they offer | What they want |
|---|---|---|
| EU | Trade deal + environmental standards + GI protection | Raw materials, 270m consumer market |
| USA | Bilateral pacts + energy investment | Minerals, counterweight to China |
| China | Infrastructure investment + soy/mineral purchases | Resource security, political influence |
Brazil opened Mercosur-China talks in early February. Argentina has its US pact. Uruguay attempted independent China negotiations in 2022.
For the EU, the conclusion is straightforward: every month of delay in ratifying the Mercosur deal is a month in which the US and China strengthen their positions.
What it means in practice
For EU exporters: Competition from the US in Mercosur markets will intensify. Companies counting on preferential tariffs under the EU-Mercosur deal may lose their edge if American firms gain access faster.
For Mercosur countries: More options means stronger negotiating leverage. Argentina, Brazil, Paraguay and Uruguay can play three partners against each other.
For the ratification process: The case for rapid implementation grows stronger. Even sceptical countries (France, Poland) must weigh what happens if the EU loses these markets to the US and China.
Sources: New York Times (05.02.2026), NPR (06.02.2026), Farmers' Journal (16.02.2026), Reuters, Politico.eu, Euractiv. EU-Mercosur Agreement: Art. 13.35 (Geographical Indications, Annex 13-B).