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New legislation
EU-Mercosur free-trade agreement faces ratification delay after European Parliament vote
The EU-Mercosur agreement, negotiated over 25 years and signed recently, aims to eliminate more than 90 percent of tariffs on goods traded between the EU and Mercosur countries (Argentina, Brazil, Paraguay and Uruguay), creating one of the world’s largest free trade areas with over 700 million consumers.
On 21 January 2026, the European Parliament voted to suspend ratification of the EU-Mercosur free trade agreement and to request a legal review by the European Court of Justice on whether the deal complies with EU treaties. The vote was extremely close, reflecting deep political divisions.
The agreement is a key strategic priority for the European Commission and Commission President Ursula von der Leyen, who sees it as a way to strengthen Europe’s economic independence in the face of rising global protectionism.
France has led opposition to the deal, citing concerns about unfair competition for European farmers, particularly from South American beef imports.
Germany, the European Commission and several industry representatives criticized the parliament’s decision, warning that delays undermine Europe’s economic and geopolitical interests. It could take up to two years to obtain the European Court of Justice ruling, adding a further delay to an agreement with Mercosur that took 25 years to negotiate.
Despite the parliamentary delay, the European Commission may still apply the agreement provisionally, while ratification in South America is expected to proceed smoothly.
What does it mean
- The ratification of the EU-Mercosur agreement is likely to be delayed for months, increasing uncertainty for businesses that were expecting improved market access.
- The vote highlights persistent political tensions within the EU between trade liberalization, agricultural protection and legal concerns.
Harmonized System 2028: New edition of the Harmonized System to enter force on 1 January 2028
The eighth edition of the Harmonized System (HS 2028) will take effect on 1 January 2028, concluding a six‑year review cycle extended due to the COVID‑19 pandemic. HS 2028 contains 299 amendment packages, resulting in 1,229 headings and 5,852 subheadings. Compared with HS 2022, it adds six headings and 428 subheadings, and removes five headings and 172 subheadings, reflecting shifts in trade, technology and policy priorities.
Public health features strongly, with new subheadings for goods needed in health emergencies—such as PPE, ambulances, ventilators and diagnostic devices—to support faster and more targeted trade responses. Vaccine classifications have been overhauled, splitting former heading 30.02 into two new headings for human vaccines and other vaccines, improving transparency in global vaccine trade.
HS 2028 also introduces a major structural change with a new heading for dietary supplements, resolving long‑standing classification issues between food and pharmaceuticals. Environmental goals are further advanced through revised rules for plastic waste aligned with the Basel Convention and new subheadings for single‑use plastic products. A new legal note defines “single‑use” to promote consistent classification and better data collection.
Next steps
With the HS 2028 amendments now adopted, the next two years will be used by the WCO and its Members to prepare for their entry into force on 1 January 2028. The WCO will develop correlation tables between HS 2022 and HS 2028, update the HS Explanatory Notes and related tools, and provide technical assistance and capacity building support.
At national level, WTO Members will carry out the necessary legislative updates, adjust IT systems, revise publications and procedures, and train customs officials, other agencies and the private sector. These coordinated efforts are essential to ensure a smooth and consistent global transition to HS 2028.
EU concludes negotiations for free trade agreement with India
On 27 January 2026 the EU and India concluded negotiations for a free trade agreement which significantly aims to strengthen the economic and political ties between both countries.
The EU and India already trade €180 billion worth of goods and services each year and by significantly reducing tariffs the EU export to India is expected to double by 2032 saving around €4 billion per year in duties on European products.
The import tariffs in India on cars are expected to gradually go down from 110% to as low as 10%. After 10 years the tariffs on EU cars might even be abolished. Tariffs on other EU products such as machinery, chemicals and pharmaceuticals will likely also be eliminated. The deal also intends to open markets for EU exports of agri-food products. For example, Indian tariffs on wine will be lowered from 150% to 75% at entry into force and eventually might reach levels of 20%. Tariffs on olive oil will go down from 45% to 0% over five years. Sensitive agricultural sectors such as beef, chicken meat, rice and sugar will be protected and thus are excluded from liberalization in the agreement.
Next steps
The EU will soon publish the agreed draft texts, which will then undergo legal review and be translated into all official EU languages. The Commission will submit the final proposal to the Council for signature and conclusion. After the Council’s approval, the EU and India can sign the agreement. It will then require the European Parliament’s consent and, after India’s ratification as well, the agreement can formally enter into force.