EU and South American country Mercosur group formally sign long-awaited agreementlandmark free trade agreementOn Saturday, tough talks to strengthen commercial ties began in the face of rising global protectionism and trade tensions after more than a quarter of a century.
The signing ceremony in the Paraguayan capital Asunción marked a major geopolitical victory for the EU in an era of U.S. tariffs and surging Chinese exports, expanding the bloc’s foothold in the resource-rich regionincreasingly controversialby Washington and Beijing.
It also sends a message that despite U.S. President Donald Trump’sActively promoteTo gain geopolitical dominance over the entire regionWestern Hemisphere.
Mercosur consists of the region’s two largest economies, Argentina and Brazil, as well as Paraguay and Uruguay. Bolivia is the newest member of the group and could join the trade deal in the coming years. Venezuela has been suspended from the bloc and is not included in the agreement.
Driven by South America’s leading grass-fed cattle countries and European industrial interests, the agreement phased out more than 90% of tariffs, created one of the world’s largest free trade zones and made shopping more affordable for more than 700 million consumers.
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European Commission President Ursula von der Leyen, the head of the EU executive, described the deal as a bulwark against the destructive policies of the Trump administration.
“This reflects a clear and considered choice: we choose fair trade over tariffs. We choose productive long-term partnerships over isolation,” von der Leyen said at the ceremony in a veiled rebuke of Trump’s trade policies.Announcing an additional 10% tariffEight European countries oppose U.S. control of Greenland.
“We will come together like never before because we believe this is the best way for our people and our country to prosper.”
Brazilian President Luiz Inácio Lula da Silva, a long-time advocate of the EU-Mercosur deal that saw slow progress in negotiations during his three non-consecutive terms, hailed the deal as a symbol of global cooperation.
“At a time when unilateralism is isolating markets and protectionism is stifling global growth, two regions that share common democratic values and a commitment to multilateralism have chosen different paths,” Lula said in a statement. X postal.
Lula’s decisionskip ceremonyA sign of simmering tensions between trade blocs.
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Brazil held the Mercosur presidency last year and had been preparing to hold a signing ceremony in the country’s capital, Brasilia, last month.when European countries cancel itdemanding more concessions to farmers concerned about possible dumping of cheap imported agricultural products from South America.
Lula, who has been deprived of the spotlight, is furious at what is widely seen in South America as the latest example of EU bureaucratic intrusion. One of the main reasons the deal took so long was Brussels’ attempt to regulate agricultural production processes in South America, from plastic packaging standards to deforestation regulation.
“The EU’s biggest wish list for developing economies willing to sign free trade agreements is often seen as condescending,” said Agathe Desmarais, senior policy fellow at the European Council on Foreign Relations.
The EU has given farmers more benefits by promising huge subsidies after imposing environmental and animal welfare regulations, imposing strict quotas on agricultural products such as beef and sugar, and staggering a timetable for tariff cuts. That forced agricultural powerhouse Italy to cross the line earlier this month.
But even as the ink dried on Saturday, Europe’s powerful protectionist lobby still hoped to prevent the deal from clearing one final hurdle: approval by the European Parliament.
France remains opposed to the deal, and President Emmanuel Macron fears farmers’ dissatisfaction with the EU could push more voters to the country’s far right in the 2027 presidential election.
“Everything will depend on the political appetite of the European Parliament,” said João Paulo Cavalcanti, a Brazilian lawyer specializing in international trade. “This would obviously create a barrier to approval.”
This story was originally published on wealth network