After two decades of on-and-off negotiations, the EU has entered the implementation phase of the EU-Mercosur Association Agreement - one of the longest trade negotiations in the EU's history. The Mercosur deal is not an isolated achievement: it sits alongside a broader, sustained EU endeavour to deepen its trade and economic security relationship with Latin America and the Caribbean (LAC), spanning Free Trade Agreements with most LAC countries, including those with Chile and Mexico most recently modernised, and Critical Raw Materials (CRM) partnerships like those with Chile and Argentina.

Having invested this much political capital to get the Mercosur and the wider LAC trade agenda over the line, the EU now faces a different, and in some ways harder, test: showing that these agreements translate into tangible benefits - for European economies and for the EU's geostrategic interests, including secure access to critical raw materials, diversified supply chains, and a reliable partner in a fragmented multipolar environment. Supporters (and sceptics) of Mercosur, and of trade liberalisation more broadly, will judge the agreement not on the signing but on delivery. An agreement that remains a legal text without concrete investments risks reinforcing, rather than answering, the concerns that
made its negotiation so difficult in the first place.  This is where the EU's next budget, the Multiannual Financial Framework (MFF) 2028-2034 and the Global Europe Instrument proposal more specifically, becomes central.

The MFF is not only the EU's main development policy instrument. It is also one of the concrete levers the EU has to back its trade and geoeconomic commitments with resources - de-risking
investment, supporting regulatory alignment, and building the infrastructure and value chains that allow agreements like that with the Mercosur to actually generate the benefits heralded to European businesses, workers, and partner countries alike. How the EU allocates and governs Global Europe funding will therefore shape not just development outcomes, but to some extent the credibility of its broader trade and geoeconomic agenda, and by extension its relationship with LAC and other partner regions going forward.

Seen this way, the case for a dedicated, adequately resourced share of Global Europe funding for LAC rests not only on a development rationale - it is a test of whether the EU can deliver on the trade and strategic partnerships it has spent significant political capital securing. Under the current negotiating box, an estimated EUR 7.7 billion is earmarked for the Americas and the Caribbean, intended to target five key priorities, some of which echo the priorities and objectives of the EU trade agenda with the region.