RTAs and international business: How the EU–Mercosur agreement reconfigures inter-regional FDI strategies.

Abstract

The EU–Mercosur Agreement is more than a trade liberalization initiative; it is a strategic framework that reshapes foreign direct investment (FDI) opportunities across both regions. This article explains how key provisions related to trade, services, public procurement, intellectual property, and regulatory cooperation influence firm-level investment decisions. We show that the agreement is likely to generate asymmetric but interconnected investment flows, with European multinationals pursuing market-, efficiency-, and asset-seeking investments in Mercosur, while Mercosur firms use investment in Europe to upgrade capabilities and access advanced markets. The findings highlight actionable strategies for firms and policy priorities needed to maximize the agreement’s long-term benefits