EU and South America Seal Historic Free Trade Deal

A quarter-century in the making, Europe and South America are finally joining hands on one of the biggest trade deals the world has ever seen.

The European Union and Mercosur bloc will sign their historic agreement Saturday in Paraguay's capital, Asunción. The pact connects over 700 million people and eliminates tariffs on more than 90 percent of trade between the regions.

Together, these economic powerhouses represent 30 percent of global GDP. The deal will make it easier for European cars, machinery, and wines to reach South American markets, while South American beef, honey, and soy will flow more freely to Europe.

Negotiations started way back in 1999 between the EU and Mercosur's founding members: Argentina, Brazil, Uruguay, and Paraguay. Despite countless obstacles and changing political landscapes, negotiators on both sides kept pushing forward.

European Commission President Ursula von der Leyen will travel to the signing ceremony alongside European Council head António Costa. Leaders from Argentina, Uruguay, and Paraguay are confirmed to attend, with Brazil's president still deciding.

The timing matters more than ever. As protectionism and unilateralism spread globally, this agreement proves countries can still work together for mutual benefit.

Brazilian President Lula da Silva called it "an historic day for multilateralism" when the deal was finalized last week. In an era when major economies are raising barriers, Europe and South America are tearing them down.

The Ripple Effect

This agreement sends a powerful message beyond trade statistics. Political scientist Alejandro Frenkel notes it helps the EU "shore up autonomy" as a major global player, while giving South America a rare unity victory during times of internal division.

Argentine trade analyst Luciana Ghiotto sees it as proof "there is a third way without tying ourselves to the United States or China." The deal creates new options for countries seeking economic partnerships without picking sides in growing global tensions.

The path forward still requires ratification by Mercosur members and the European Parliament. To address concerns from European farmers worried about competition, the Commission has announced a crisis fund and safeguards that allow tariff suspensions if imports surge too quickly.

After 25 years of patient diplomacy, two continents are proving cooperation can triumph over division.