EU and South America Seal Massive Trade Deal After 25 Years
After a quarter century of negotiations, Europe and South America just created one of the world's largest free trade zones, covering 700 million people. Leaders are calling it a powerful stand for cooperation in an era of trade wars and isolation.
In a world rattled by tariff threats and trade tensions, leaders from Europe and South America just did something remarkable: they chose partnership over protectionism.
The European Union and Mercosur countries (Brazil, Argentina, Uruguay, and Paraguay) signed a historic trade agreement Saturday in Asuncion, Paraguay. The deal, 25 years in the making, creates a free trade zone spanning two continents and covering 30 percent of global GDP.
"We choose fair trade over tariffs, we choose a productive long-term partnership over isolation," EU chief Ursula von der Leyen said at the ceremony. Her words came just as US President Donald Trump threatened European nations with 25 percent tariffs, sending countries searching for new trade allies.
The agreement eliminates tariffs on more than 90 percent of trade between the regions. European cars, wine, and cheese will flow more easily to South America, while South American beef, poultry, and soybeans get better access to European markets.
Brazil's Foreign Minister Mauro Vieira called the deal "a bulwark in the face of a world battered by unpredictability, protectionism, and coercion." European Council head António Costa praised it as an alternative to using "trade as a geopolitical weapon."
The numbers tell an impressive story. By 2040, the agreement could boost EU GDP by 77.6 billion euros and Mercosur GDP by 9.4 billion euros. European exports to South America are expected to jump 39 percent, while Mercosur exports to Europe could rise 17 percent.
The Ripple Effect
This deal represents more than economics. At a moment when global cooperation feels increasingly rare, leaders from 31 nations came together to say yes to openness and partnership.
The agreement still needs approval from the EU parliament and ratification by each Mercosur nation. If all goes to plan, it will take effect by the end of 2026, bringing new jobs and opportunities to 700 million people across both continents.
In an age of walls and tariffs, 31 countries just chose bridges instead.
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Based on reporting by Buenos Aires Times
This story was written by BrightWire based on verified news reports.
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