ASUNCION, Paraguay — The European Union (EU) and the South American trade bloc Mercosur formally signed a long-awaited free trade agreement on Saturday, marking a major step in strengthening commercial ties amid rising global protectionism and trade tensions.
The signing ceremony in Paraguay’s capital, Asuncion, concluded over 25 years of negotiations and signals a strategic victory for the EU, expanding its presence in a resource-rich region increasingly influenced by both Washington and Beijing. The agreement could still face hurdles in the European Parliament, where ratification is required, though approval in South America is widely expected.
Mercosur, composed of Argentina, Brazil, Paraguay, and Uruguay, will see gradual elimination of over 90% of tariffs on goods ranging from Argentine beef to German automobiles, creating one of the world’s largest free trade zones and benefiting more than 700 million consumers. Bolivia may join in the future, while Venezuela remains suspended.
European Commission President Ursula von der Leyen framed the deal as a defense of fair trade, contrasting it with the U.S. administration’s protectionist policies. “It reflects a clear and deliberate choice: We choose fair trade over tariffs. We choose a productive long-term partnership over isolation,” von der Leyen said, coinciding with Trump’s announcement of 10% tariffs on eight European nations.
Brazilian President Luiz Inácio Lula da Silva praised the accord as a win for multilateral cooperation, emphasizing the importance of global partnerships in countering unilateralism and protectionism. However, Lula skipped the signing ceremony, reflecting lingering tensions after European demands delayed the deal to secure stricter environmental regulations, import quotas, and staggered timelines for tariff reductions.
While France remains opposed due to concerns over its domestic agricultural sector, EU Trade Commissioner Maroš Šefčovič expressed confidence that European Parliament ratification would proceed in the first half of the year. “We’ll have very intense communication with all the members… so we can benefit from this historic achievement,” he said.
The agreement demonstrates the renewed relevance of Mercosur after years of political disputes, economic crises, and regional protectionism. Argentine President Javier Milei, despite previous skepticism toward the bloc, endorsed the accord, emphasizing that “closure and protectionism… are the greatest causes of economic stagnation.”
The EU-Mercosur free trade deal now positions the two regions to cooperate more closely on trade, regulatory standards, and global market access, signaling a commitment to international law, predictability, and reduced trade barriers.
Paraluman P. Funtanilla
Paraluman P. Funtanilla is Tutubi News Magazine's Marketing Specialist and is a Contributing Editor. She finished her degree in Communication Arts in De La Salle Lipa. She has worked as a Digital Marketer for start-up businesses and small business spaces for the past two years. She has earned certificates from Coursera on Brand Management: Aligning Business Brand and Behavior and Viral Marketing and How to Craft Contagious Content. She also worked with Asia Express Romania TV Show.
- Paraluman P. Funtanilla
- Paraluman P. Funtanilla
- Paraluman P. Funtanilla
- Paraluman P. Funtanilla
