The EU–Mercosur Trade Deal and the Non-Space Barriers that shape (Space) Business
By Laura Delgado López
2 February 2026
Photo: NASA ID: iss055e070222
It took 25 years of negotiations, but a deal was finally reached for a landmark trade agreement to better connect the economies of the European Union (EU) and the four Latin American nations of Mercosur - Argentina, Brazil, Paraguay and Uruguay. The renewed attention around the agreement has largely focused on its tumultuous road, ongoing political controversy and its implications for other trade relationships. The agreement makes no explicit reference to advanced technologies such as space, so it hasn’t been a topic of interest for the space community. Yet it’s a useful jumping off point to reflect on what makes international space business so difficult, even when resources and technical capabilities exist.
The EU-Mercosur Partnership Agreement is focused on lowering a set of barriers to market entry, primarily in agriculture and food production, as well as setting environmental, manufacturing and health standards, and removing tariffs. It also targets a broader set of issues related to investment, regulatory alignment, dispute resolution, and entry rules for professionals. “Non-space” mechanisms like these are precisely the ones that shape whether international business and investment in space actually take root and move beyond the headlines.
Too often, space policy discussions focus on the hardware - the launch vehicles or sensors - or the creative space applications tied to international deals. These are definitely the exciting pieces of the puzzle, but this focus tends to heighten the implicit assumption that if technology is mature and the demand is clear, commercial activity will follow. And with the global space economy projected to continue its upward trend, business opportunities abound all over the world. In practice, however, space transactions are embedded in wider political, legal, and institutional systems that were not designed for fast-moving, commercially driven sectors. It is on these, the licenses, export approvals and cybersecurity safeguards, that business leaders end up needing to invest their time: when those systems create friction, even the most exciting space projects struggle.
Practical constraints that complicate international space business include rules around mobility of people, such as visas and security clearances, and complex and overlapping regulatory processes, which are often spread across multiple agencies with different risk tolerances and timelines. Add to that non-transparent procurement systems that increasingly favor domestic vendors, which make it particularly difficult for foreign small and medium-sized enterprises to compete. Finally, there’s language barriers, cultural, and bureaucratic differences that raise transaction costs and add delays. These barriers are not unique to space, but they will also not be resolved by space hype alone.
Aligning the speed of business with the practicalities of process is hard - even without crossing borders. The U.S. intelligence and defense community has spent many years emphasizing the need to adopt commercial solutions more rapidly. Commercial integration strategies and policies echo this objective loudly, yet progress has been slow.
... provisions on professional mobility, regulatory alignment or investment protection do not create space markets on their own. But they do shape the conditions under which international business becomes less risky and more attractive.
Signing ceremony for the Mercosur-EU agreement in Asunción, Paraguay (17/01/2026). Photo: Carlos Cruz / Brazilian Ministry of Foreign Affairs (CC BY-ND 4.0).
Businesses still point to acquisition and compliance processes that remain slow, rigid, and poorly aligned with commercial innovation cycles. Importantly, these systems regulate far more than space activity, and they have not adapted easily to the rapid pace of change in the sector – more speeches calling for government to leverage business innovation is not going to change that.
This is where the EU–Mercosur agreement becomes relevant. If fully ratified, a process that could well take years, it could help reduce some of these frictions between the European Union and the two most significant space actors in Latin America, Brazil and Argentina. To be clear, provisions on professional mobility, regulatory alignment or investment protection do not create space markets on their own. But they do shape the conditions under which international business becomes less risky and more attractive. For space actors on both sides, that predictability matters, in some cases as much as the promise of innovative technical or capability solutions. To return to the U.S. example, it is no accident that European nations and Japan are significant partners – of both government and industry players – in both space and high-technology trade.
The undeniable capability advantage of the world’s closest launch site to the equator highlights the limits of a “build it and they will come” mindset. The Alcântara Space Center in Brazil’s northern Atlantic Coast began operations in 1990 and has long been viewed as an attractive site for international launch activity, especially for those aiming for geosynchronous orbit. In 2019, Brazil and the United States signed a Technology Safeguards Agreement, removing a major legal obstacle for U.S. launches from the site. Yet sustained commercial activity has not followed. The first orbital launch attempt by a commercial actor, South Korea’s Innospace, failed last December.
This outcome is not simply a function of the availability of the capability. It reflects the broader ecosystem required to support commercial operations – such as infrastructure investment – and the mix of other process and business incentives that offer confidence in a risky venture that is still, well, rocket science. Addressing one legal barrier was necessary, but not sufficient, a sobering lesson for the launch sites being planned in the region.
EU and Mercosur countries already engage in a range of space-related cooperation, offering a glimpse of how a trade agreement could ease pathways for more business and government collaboration, at Alcântara Space Center and beyond. The European Space Agency (ESA), for instance, operates a deep-space ground station in Argentina, where a longstanding partnership with Italy also supports SIASGE, a coordinated constellation of radar satellites for disaster monitoring and response. These efforts are reinforced by broader EU–Latin America initiatives on digital connectivity and data infrastructure, which could generate indirect benefits for space-enabled services, particularly in a region where improved connectivity remains a pressing need.
Agriculture and sustainable development commitments of the Paris Agreement are central pillars of the EU–Mercosur agreement, providing another important bridge between trade and space activity, especially with respect to Brazil. Embrapa, a state-owned enterprise focused on agricultural research and development, has collaborated with the EU on best practices in food systems and is engaged in a space farming initiative with the Brazilian Space Agency. As a country that has relied on satellites to monitor deforestation in the Amazon for many years, Brazil highlighted the role of space technology when it hosted COP30 last year, including a workshop focused on ESA’s Biomass mission.
The EU–Mercosur agreement was not designed with space in mind - no trade agreement ever is. But it speaks to some of the non-technical constraints that shape international space business so it’s worth the attention of space analysts and experts. They aren’t glossy, but trade frameworks, legal and regulatory coordination mechanisms that facilitate trust and mobility of people and resources can do a lot to shape the future global space landscape.
Laura Delgado López is an Advisor to the SpaceCyT Institute. Laura is an independent space and geospatial governance expert with Pathway 2, LLC. She draws from over 15 years working in space policy in the Washington, D.C. area. Her career has spanned industry, the nonprofit sector, and government, having most recently served as Policy Advisor in the Science Mission Directorate at NASA HQ.
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