EU-Mercosur pact opens up new trade zone

European Union (population: 450 million) and Mercosur, comprising Brazil, Argentina, Paraguay and Uruguay (population: 268 million), have signed a free trade agreement after 25 years of procrastinated negotiations.

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The trade volume between the regions in 2024 was III billion euros. The agreement was signed at Asuncion in Paraguay on Saturday. It was attended from the EU side by European Commission President Ursula von der Leyen and European Council President Antonio Costa and Mercosur represented by the presidents of the member countries excepting Brazil. The agreement will create the largest free trade zone. Von der Leyen said, “This agreement sends a very strong message to the world. It reflects a clear and deliberate choice. We choose fair trade over tariffs. We choose a productive long-term partnership over isolation.”

Costa said, “This agreement help both our blocs navigate an increasingly turbulent political environment without abandoning our values, marking a true milestone in shoring up our economic security.” The Brazil government said that the agreement was emblematic of President Luiz Inacio da Silva's efforts to “expand and diversify markets”.