The European Union and the Mercosur bloc of South American countries formally signed a long-sought landmark free trade agreement on Saturday, capping more than a quarter-century of torturous negotiations to strengthen commercial ties in the face of rising protectionism and trade tensions around the world.
The signing ceremony in Paraguay’s capital, Asunción, marks a major geopolitical victory for the EU in an age of American tariffs and surging Chinese exports, expanding the bloc’s foothold in a resource-rich region increasingly contested by Washington and Beijing.
It also sends a message that South America keeps diverse trade and diplomatic relations even as U.S. President Donald Trump makes an aggressive push for geopolitical dominance across the Western Hemisphere.
Mercosur consists of the region’s two biggest economies, Argentina and Brazil, as well as Paraguay and Uruguay. Bolivia, the bloc’s newest member, can join the trade deal in the coming years. Venezuela has been suspended from the bloc and isn’t included in the agreement.
Promoted by South America’s renowned grass-fed cattle-raising countries and Europe’s industrial interests, the accord’s gradual elimination of more than 90% of tariffs creates one of the world’s largest free trade zones and makes shopping cheaper for more than 700 million consumers.
