After 25 years of negotiations, the European Union and the South American bloc Mercosur signed a groundbreaking free trade agreement on the weekend in Asuncion, Paraguay. This deal, the EU’s largest-ever, aims to eliminate tariffs on over 90% of bilateral trade and could shape global markets after its expected entry into force by the end of 2026.
The ceremony on Saturday brought together representatives from the EU and the Mercosur members—Brazil, Argentina, Paraguay and Uruguay. EU Commission President Ursula von der Leyen called it a choice for “fair trade over tariffs” and a step toward “a productive long-term partnership over isolation.” Paraguay’s President Santiago Pena added that the deal sends “a clear signal in favor of international trade” amid rising global tensions.
European Council President Antonio Costa highlighted the pact’s defense of rules-based free trade and multilateralism, contrasting it with the use of trade as a geopolitical weapon. The agreement arrives in the wake of sweeping tariffs and trade threats under former US President Donald Trump’s administration, prompting countries to seek new partnerships.
Together, the EU and Mercosur represent around 30% of global GDP and more than 700 million consumers. Next up: approval by the European Parliament and ratification by national legislatures in Brazil, Argentina, Paraguay and Uruguay. If all goes well, the treaty could be in force by late 2026, opening fresh opportunities for businesses and consumers on both sides of the Atlantic. 🌍✈️🤝
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EU and Mercosur sign trade agreement after 25 years of negotiation
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