EU, Mercosur Set to Seal Historic Free Trade Deal After 25 Years of Talks
Top EU officials are set to travel to Paraguay on Saturday to sign a free trade agreement with South American bloc Mercosur, paving the way for the European Union’s largest ever trade accord after 25 years of negotiations.
The trade deal would slash tariffs with the goal of expanding goods trade that is evenly split and was worth 111 billion euros in 2024. It has been highly contested within the EU.
Proponents say the accord is essential to offset business lost to U.S. tariffs and reduce reliance on China by securing access to critical minerals.
The EU and Mercosur countries Argentina, Brazil, Paraguay and Uruguay will in fact sign two agreements rather than one – the Interim Trade Agreement (ITA) covering only trade, and the EU-Mercosur Partnership Agreement (EMPA) encompassing political and sectoral cooperation as well as trade and investment.
The ITA could in theory enter force after the signature, but convention dictates that this will only happen after consent from the European Parliament. A final vote may only take place in April or May.
Brazilian President Luiz Inacio Lula da Silva on Friday said the European Union and the South American bloc are about to make history with the signing of the free trade agreement.
Speaking to reporters next to the European Commission Chief Ursula von der Leyen in Rio de Janeiro, Lula said the deal will bring more opportunities for both sides, along with more trade and investments.
The EU-Mercosur deal is just one more example of several being negotiated and signed by countries that were hit with steep tariffs by the Trump administration, such as Indonesia’s trade accord with the European bloc and a pledge between Japan, South Korea and China to increase regional trade.
