Free Trade Area of 700 Million? Bulgaria's Interim Government Approves Landmark EU-Mercosur Agreement

The caretaker government has approved a decision endorsing the Partnership Agreement between the European Union and its Member States and the Mercosur bloc, which includes Argentina, Brazil, Paraguay and Uruguay. The move formally aligns Bulgaria with the EU-level process advancing the long-anticipated trade and cooperation framework.

Relations between the EU and Mercosur are currently governed by an Interregional Framework Cooperation Agreement dating back to 1995. After more than two decades of negotiations, both sides reached a political agreement on 6 December 2024 to conclude a comprehensive partnership deal aimed at deepening economic and political ties.

Officials say the agreement is expected to bring broad long-term benefits for both the European Union and Bulgaria, including improved access to goods and services markets, more diversified trade routes and supply chains, and stronger investment flows. It is also seen as a tool for enhancing economic security and improving the EU’s ability to respond to global challenges.

The creation of a free trade area covering a combined market of more than 700 million people is highlighted as one of the most significant outcomes, with expectations that Bulgarian companies will gain more favorable conditions for operating in Mercosur countries.

Earlier this year, the Council of the European Union approved the decision to sign the agreement, which was formally signed on behalf of the bloc on 17 January 2026. Following these steps, Bulgaria has now moved to complete its national-level approval process.

As part of the procedure, the caretaker cabinet has authorized Bulgaria’s Permanent Representative to the EU to sign the Partnership Agreement. The Ministry of Foreign Affairs will prepare the instrument of full powers, which will then be submitted to the EU Council’s Treaties Office via the Permanent Representation.