OBELA Analysis

After more than 30 years of negotiations, the EU-Mercosur Free Trade Agreement was initially signed on 17 January 2026 (ratification). Almost 800 million people and more than 30 nations are involved in what will be one of the most important free trade agreements globally. However, the treaty is the subject of considerable controversy, with questions about whether the free trade agreement benefits all these people and whether they participate equally in it. Faced with a United States that uses tariffs as an aggressive trade policy, several countries are changing the direction of their trade, such as Mercosur, which has agreed to a free trade agreement with the European Free Trade Association

Following the 2008 crisis, the BRICS countries began to develop their own International Financial Architecture (IFA) to reduce reliance on the dollar. They have opted for trade paid in local currency, as well as for the development of various infrastructure that reduces reliance on the Western-dominated transaction system, to lower transaction costs and reduce uncertainty about the dollar's price.

The United States slowed, but without entering a recession. The economy cooled in the first two quarters, and the third-quarter data released by the BEA are unreliable because the offices that handled the work were closed for two months. On the other hand, the head of the Bureau of Labour Statistics (BLS) was dismissed and replaced by someone close to the president's political group, who may repeat the pattern of distorting statistics to favour the regime, as seen in Latin American and African countries in previous years.