EU and Mercosur sign landmark trade deal after 25 years of talks
The EU and Mercosur signed a trade agreement in Paraguay, opening the bloc to reduced tariffs while sparking protests from farmers and environmental groups.
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By Torontoer Staff
Officials from the European Union and the South American bloc Mercosur signed a free trade agreement on Saturday in Asuncion, Paraguay, concluding 25 years of negotiations. The accord must still be approved by the European Parliament and ratified by Argentina, Brazil, Paraguay and Uruguay before taking effect.
Supporters describe the pact as the EU’s largest ever trade deal, aimed at reducing tariffs and increasing trade between two blocs that together represent about 700 million people. Critics, including farmers and environmental groups, say the agreement risks a surge of inexpensive agricultural imports and could accelerate deforestation in South America.
What the agreement covers
The deal is designed to cut or eliminate tariffs on many goods traded between the EU and Mercosur members. European exports to Mercosur are dominated by machinery, chemical products and transport equipment. Mercosur exports to the EU include agricultural products, minerals, wood pulp and paper.
Trade between the two blocs reached roughly 111 billion euros in 2024. Proponents say lower trade barriers could expand market access on both sides, while opponents caution that benefits will be uneven across sectors and regions.
Who signed and what happens next
European Commission President Ursula von der Leyen and European Council President Antonio Costa attended the signing ceremony alongside leaders of Mercosur member states. Brazilian President Luiz Inacio Lula da Silva did not attend in person and was represented by his foreign minister.
The agreement now requires formal consent from the European Parliament and ratification by the national legislatures of Argentina, Brazil, Paraguay and Uruguay. Several EU governments had already signalled support, but key political battles remain in national capitals and in Brussels.
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.
Ursula von der Leyen, European Commission President
Opposition from farmers and environmental groups
Farmers and environmental organisations have been vocal in their criticism. Their main concerns focus on the prospect of cheaper South American agricultural imports undercutting local producers, and on insufficient safeguards to prevent deforestation tied to expanded commodity production.
The deal has already provoked protests in several EU countries. France announced it will vote against the agreement after demonstrations by farmers, a position reported by national leadership. Those objections could complicate the ratification process in the European Union.
- Possible increase in inexpensive agricultural imports from Mercosur countries
- Concerns about higher rates of deforestation and weaker enforcement of environmental standards
- Political opposition in some EU member states, including France
- Need for European Parliament consent and national ratifications in Mercosur
What it could mean for consumers and businesses
If ratified, the agreement could lower costs for some imported goods and open new export opportunities for manufacturers in both regions. Exporters of machinery and chemical products in the EU stand to gain access to a large South American market, while agricultural and mineral exporters in Mercosur could see expanded European demand.
At the same time, local producers in both regions may face stiffer competition. Lawmakers and campaigners are likely to focus on mechanisms to enforce environmental commitments and to protect vulnerable sectors during the ratification debates.
Timeline and political hurdles
There is no immediate start date for the agreement. Ratification could take months or longer, depending on how national parliaments and the European Parliament manage the political fallout. Environmental and agricultural lobbying, along with public protests, are expected to shape parliamentary discussions.
If key EU members withhold approval, the pact could be delayed or renegotiated. Mercosur legislatures must also complete their own ratification processes, which present additional variables.
For now, the signing marks a political milestone after a quarter century of talks, but it leaves substantial work for politicians, regulators and interest groups on both sides of the Atlantic.
The agreement’s future will depend on how negotiators and lawmakers address environmental enforcement, agricultural protections and domestic political pressures during the ratification stage.
EUMercosurtradeenvironmentagriculture
