The European Union and Mercosur are close to finalizing an updated trade agreement after years of stalled talks, according to people familiar with the negotiations. The draft is said to include revised tariff schedules and new protections aimed at reducing supply-chain risks.

If approved, the deal would reshape commercial ties between the EU and the South American bloc, which includes Argentina, Brazil, Paraguay and Uruguay. Supporters argue the pact could expand market access and improve resilience in sectors affected by recent tariff disputes and global supply shocks.

Negotiators have been working through longstanding disagreements over market access, industrial competition and safeguards for key imports. While details have not been formally announced, the latest draft appears to reflect a compromise designed to make the agreement politically viable on both sides.

Any final signing would still require further review and ratification by member states and relevant institutions. Even so, the progress marks a notable step toward one of the largest trade arrangements under discussion between Europe and Latin America.