EU–Mercosur deal signed in Paraguay as ratification battle looms

The European Union and the Mercosur bloc on Saturday signed a long-awaited trade agreement in Asunción, Paraguay, sealing one of the world’s largest free trade deals after more than 25 years of negotiations marked by repeated political stand-offs.

The ceremony brought together Ursula von der Leyen, António Costa, and leaders from Mercosur, including Argentina, Uruguay and host country Paraguay. Brazil’s president Luiz Inácio Lula da Silva, a key supporter of the accord, did not attend in person and was represented by his foreign minister.

“This agreement sends a strong signal to the world,” von der Leyen said at the signing. “It reflects a clear and deliberate choice. We choose fair trade over tariffs, and a long-term, productive partnership.”

A hard-fought green light

The signature caps an intense internal EU debate that only cleared its final hurdle last week, when Member States endorsed the deal by qualified majority after a round of last-minute concessions. France, Poland, Austria, Ireland and Hungary voted against, while Belgium abstained.

Now comes the most delicate phase: ratification. The agreement must be approved by the European Parliament and by national parliaments on both sides of the Atlantic, where opposition – particularly from the farming sector – remains strong.

Those divisions are now set to resurface during the most delicate phase: ratification. The treaty must still be approved by the European Parliament and by national parliaments on both sides of the Atlantic, where opposition — particularly from farming groups — remains vocal.

If fully ratified, the agreement would establish a free trade area covering more than 700 million people across Europe and Latin America. More than 90 per cent of tariffs on EU exports would be phased out over time, a change Brussels says would primarily benefit Europe’s manufacturing and industrial sectors.

Mercosur countries, in turn, would gain wider access to the EU market for agricultural products. That access would be governed by strict tariff-rate quotas designed to protect the EU’s most sensitive sectors, including beef, poultry and sugar.

Geopolitics first, economics contested

For Brussels, the deal is as much geopolitical as economic. The Commission argues that it reinforces rules-based trade and deepens EU engagement in Latin America at a moment of intensifying competition with China and lingering uncertainty over the future direction of U.S. trade policy.

Yet doubts have long accompanied the talks. Even optimistic projections acknowledge that while the EU is likely to post gains in services, the balance in goods trade could prove more challenging. 

Critics fear increased pressure on European farmers and question whether environmental safeguards will be robustly enforced.

To address these concerns, von der Leyen has pointed to safeguard mechanisms embedded in the agreement, including clauses that would allow the EU to suspend imports and trigger tighter controls in cases of serious market disruption or dumping.

After a quarter-century of negotiations, trust has pushed the deal over the line — for now. Its fate now rests with parliaments, where the most unpredictable chapter of the EU–Mercosur saga is about to unfold.

Image Credit: rawpixel.com. (n.d.). The Commission relaunches the post‑2027 CAP: €45 billion more for agriculture [Photograph]. Rawpixel. https://www.agenzianova.com/en/news/The-Commission-relaunches-the-post-2027-CAP%3A-45-billion-more-for-agriculture/