• The EU and Mercosur have signed a landmark free trade agreement after 25 years of negotiations.
• The deal aims to eliminate tariffs on over 90% of bilateral trade, creating one of the world's largest free trade areas.
• European Commission President Ursula von der Leyen hailed the agreement as a strong message against protectionism.
• Concerns remain regarding potential job losses in South America and protests from European farmers over competition.
• The agreement still requires ratification by the European Parliament and Mercosur members for final implementation.

The European Union and the South American trade bloc Mercosur formally signed a significant free trade agreement on Saturday in Paraguay, marking the end of over 25 years of complex negotiations. The agreement seeks to eliminate tariffs on more than 90% of bilateral trade, thereby establishing one of the world’s largest free trade zones, which includes nearly 700 million consumers and accounts for roughly 30% of global GDP, according to Indiatimes, Los Angeles Times, and Reuters.

The signing ceremony was attended by top officials including European Commission President Ursula von der Leyen, who emphasized that the deal signals a departure from isolationism and protectionism in favor of fair trade partnerships. Von der Leyen stated, “We choose fair trade over tariffs. We choose a productive, long-term partnership over isolation,” reflecting the geopolitical importance attributed to the agreement amidst shifting global trade dynamics, according to South China Morning Post, Indiatimes, and Al Jazeera.

The deal, which allows increased European access to South American agricultural markets and vice versa, has raised concerns among farmers in both regions. Numerous protests have erupted in Europe, particularly among farmers fearing a flood of cheaper South American products produced under different standards, leading to potential job losses in Europe. In Argentina alone, projections indicate up to 200,000 jobs could be lost in the automotive sector, according to The Local and Los Angeles Times.

While the agreement must still be ratified by the European Parliament and the legislatures of the Mercosur countries, it has already been approved by a majority of EU member states. The implementation of the deal, which is expected to come into effect by the end of 2026, illustrates a strategic pivot for the EU and Mercosur amidst increasing global uncertainty and protectionism, according to Reuters, Al Jazeera, and Indiatimes.