Senior officials from the European Union and the South American trade bloc Mercosur signed a landmark free trade agreement in Asunción, Paraguay, marking the conclusion of 25 years of negotiations and setting the stage for what would become the EU’s largest trade accord.
The signing follows approval from a qualified majority of EU member states last week and shifts attention toward a complex ratification process on both sides of the Atlantic.
European Commission President Ursula von der Leyen and European Council President António Costa attended the ceremony alongside leaders from Argentina, Uruguay, and host nation Paraguay.
Brazilian President Luiz Inácio Lula da Silva, a strong supporter of the deal, was represented by his foreign minister.
The agreement was finalized despite sustained opposition from several EU countries, including France, Poland, Austria, Ireland, and Hungary, with Belgium abstaining.
Von der Leyen described the deal’s broader significance, saying, "This agreement sends a very strong message to the world. It reflects a clear and deliberate choice. We choose fair trade over tariffs. We choose a productive, long-term partnership over isolation,"
EU officials view the pact as reinforcing rules-based trade during a period of global economic fragmentation and competition for influence in Latin America.
If ratified, the agreement would establish a free trade area encompassing more than 700 million people across Europe and Latin America.
Trade between the two blocs reached 111 billion euros in 2024, with EU exports dominated by machinery, chemicals, and transport equipment, while Mercosur exports focus on agricultural goods, minerals, and wood pulp.
More than 90 percent of tariffs on EU exports would be phased out over time, while Mercosur agricultural access would be governed by quota systems aimed at protecting sensitive European sectors.
Opposition from European farming and environmental groups remains strong, driven by concerns over cheaper imports and deforestation.
To secure political backing, the European Commission committed €45 billion in additional support for EU farmers.
Final approval now rests with the European Parliament and the national legislatures of Argentina, Brazil, Paraguay, and Uruguay.