The European Union and South American Mercosur bloc have officially signed a significant free trade agreement after more than 25 years of challenging negotiations. This agreement aims to strengthen economic ties amidst increasing protectionism and trade tensions globally. The signing ceremony held in Asunción, Paraguay, signifies a crucial geopolitical win for the EU amid trade disputes with the U.S. and China for influence in the resource-rich South American region.
European Commission President Ursula von der Leyen emphasized the strategic importance of the deal, highlighting the EU’s commitment to fair trade and long-term partnerships over isolation. The agreement, which opens up a market of over 700 million consumers and a quarter of the world’s GDP, is set to eliminate over 90% of tariffs between the two regions.
Despite the progress, the agreement still needs approval from the European Parliament, facing opposition from protectionist groups concerned about the impact on local industries. While most tariffs will be phased out over a decade, certain sensitive products like beef will have quotas to address European farmers’ apprehensions. Italy has supported the deal due to safeguards and subsidies for farmers, but France has expressed reservations.