The European Union and the South American economic bloc Mercosur have finalized a free trade agreement, paving the way for the creation of the world’s largest free trade zone. The deal, which was signed on Saturday, aims to promote fair trade and strengthen economic ties between the two regions.
European Commission President Ursula von der Leyen described the agreement as a “clear and deliberate choice” that prioritizes fair trade over tariffs. The pact includes Argentina, Brazil, Paraguay, and Uruguay, and is expected to have a significant impact on global trade.
The agreement comes after 25 years of negotiations and has received support from a majority of EU countries, despite opposition from France and Poland. The agricultural sector has been vocal in its criticism of the deal, with farmers across Europe staging protests against the potential influx of cheaper imports from South America.
Demonstrations are set to continue on Tuesday in Strasbourg, where thousands of farmers and tractors are expected to gather outside the European Parliament. A parliamentary vote is scheduled for Wednesday, which could potentially challenge the deal at the EU’s Court of Justice.
According to the European Council, the free trade zone will comprise a market of over 700 million consumers. The EU is Mercosur’s second-largest trading partner in terms of goods, accounting for nearly 17% of the bloc’s total trade in 2024. EU exports to Mercosur reached €55.2 billion in 2024, while imports from the bloc were €56 billion, resulting in a total trade value of over €111 billion. This represents a growth of more than 36% since 2014.
The trade agreement is significant, as it promotes economic cooperation and reduces trade barriers between the EU and Mercosur. The deal’s implementation is expected to have far-reaching consequences for the global economy, and its impact will be closely monitored in the coming months. As the EU and Mercosur move forward with the agreement, they will likely face challenges and opportunities in their efforts to strengthen economic ties and promote fair trade practices.
