EU, Mercosur bloc ink major trade deal reject 'tariffs'

SOUTH American and EU officials at the weekend signed a major trade deal, which they hailed as sending a powerful message at a time of tariff threats, global uncertainty and protectionism.

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The deal between the 27-nation EU and Mercosur bloc members Brazil, Argentina, Uruguay and Paraguay creates one of the world’s largest free trade areas after 25 years of tricky negotiations.

It was given fresh impetus amid the sweeping use of tariffs and trade threats by US President Donald Trump's administration, which has sent countries scrambling for new partnerships.

Trump at the weekend threatened multiple European nations with tariffs of up to 25% until he manages to gain control of the Danish territory Greenland.

“We choose fair trade over tariffs, we choose a productive long-term partnership over isolation,” EU chief Ursula Von der Leyen said at the signing ceremony in Asuncion, Paraguay.

Paraguay’s President Santiago Pena also praised the treaty as sending “a clear signal in favour of international trade” in “a global scenario marked by tensions”.