EU, Mercosur bloc sign free trade deal after 25 years of negotiations

In light of tariff threats and growing uncertainty surrounding global cooperation, European and South American officials have signed a significant free trade agreement, opening the way for the largest-ever trade agreement for the EU.

After 25 years of negotiations, the 27-nation EU and South America’s Mercosur bloc reached a deal that will make one of the largest free trade areas in the world.

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The European Parliament must now approve the agreement, which is intended to lower tariffs and promote trade between the two regions, and have it ratified by the legislatures of Mercosur members Argentina, Brazil, Paraguay, and Uruguay.

At the signing ceremony in Asuncion, the country’s capital, EU leader Ursula Von der Leyen said, “We choose fair trade over tariffs, we choose a productive long-term partnership over isolation.”

In “a global scenario marked by tensions,” Paraguay’s president Santiago Pena also praised the agreement as sending “a clear signal in favor of international trade.”

Brazilian Foreign Minister Mauro Vieira hailed it as a “bulwark” in the face of a “globalized, oppressive, and coercive world”

Farmers and environmental groups, who have voiced concerns about a surge of cheap South American imports and worsening deforestation, gave the deal a green light from the majority of Europe’s nations last week.

Last week, thousands of Irish farmers launched a protest against the agreement, accusing European leaders of sacrificing their interests.

However, the Paraguayan leaders claimed that the agreement would provide opportunities for people on both sides of the Atlantic.

Together, the EU and Mercosur account for more than 700 million consumers and 30% of the global GDP. By the end of 2026, the agreement, which eliminates tariffs on more than 90% of bilateral trade, is anticipated to be in force.

The agreement will facilitate the entry of South American beef, poultry, sugar, rice, honey, and soya beans into Europe while promoting European exports of cars, wine, and cheese.

The Mercosur countries make up a “huge area that produces enormous amounts of agricultural products [products] and raw minerals,” according to Al Jazeera’s Latin America editor Lucia Newman, who was reporting from Paraguay on Saturday.

They are extremely interested in the deal because it will open up an enormous market for them in Europe, but with more stringent requirements than they have so far,” they said in South America. Therefore, there will need to be some accommodating,” Newman said.

She added that signing the deal meant sending a “geopolitical message” to the United States and other countries was crucial.

According to Newman, “this is a gesture to support multilateralism at a time when isolationism and tariffs are trying to rule the world,” as Von der Leyen said.

US President Donald Trump announced new tariffs against a number of European nations shortly before the signing ceremony for their opposition to his plan to annex Greenland.