ASUNCION: 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 humid capital of 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 amessage 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, is not included in the trade deal but could join in the coming years. Venezuela has been suspended from the bloc and isn’t included in the agreement. Supported by South America’s renowned grass-fed cattle-raising countries and European industrial interests, the accord will gradually eliminate more than 90% of tariffs on goods ranging from Argentine beef to German cars, creating one of the world’s largest free trade zones and making shopping cheaper for more than 700 million consumers.
Leaders call deal a win over protectionism
European Commission President Ursula von der Leyen, who heads the EU’s executive branch, portrayed the deal as a bulwark against the disruptive policies of the Trump administration. “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 declared in an veiled rebuke of Trump at the ceremony, which got underway as Trump announced 10% tariffs on eight European nations over their opposition to American control of Greenland.