South America’s Mercosur Members Sign Free Trade Deal With EU
The European Union and the Mercosur bloc of South American nations have formally signed a long-anticipated free trade agreement, concluding more than 25 years of negotiations.
The agreement is designed to deepen economic ties between the two regions at a time when global trade is increasingly shaped by protectionism, tariffs, and geopolitical rivalry.
The signing ceremony, held in Asunción, Paraguay, is widely viewed as a significant geopolitical achievement for the EU. As the United States relies more heavily on tariffs and China continues to expand its export reach, the agreement strengthens Europe’s strategic presence in a resource-rich and fast-growing region. EU leaders see the deal as a signal of continued commitment to open markets and multilateral cooperation.
European Commission President Ursula von der Leyen described the agreement as geopolitically vital, arguing that its importance “cannot be overstated” amid renewed scepticism toward free trade. She emphasised that the EU is choosing “fair trade over tariffs” and a long-term, productive partnership over economic isolation.
Once implemented, the agreement will create one of the world’s largest free trade zones. It brings together the EU and the four founding Mercosur members – Argentina, Brazil, Paraguay and Uruguay – forming a combined market of more than 700 million consumers and representing roughly a quarter of global gross domestic product.
The deal will eliminate over 90 percent of tariffs on goods and services traded between the two blocs. While many tariffs will be removed shortly, others will be phased out over 10 to 15 years. However, sensitive agricultural products, including beef, will be subject to strict quotas to appease European farmers.
