South American and European Union officials on Saturday signed a major trade deal, which they hailed as sending a powerful message at a time of tariff threats, global uncertainty and protectionism.
The European Union and the Mercosur group of South American nations on Saturday formally signed a long-awaited ‘historic’ free trade agreement, bringing to an end more than 25 years of arduous negotiations aimed at boosting trade ties amid escalating global protectionism and trade frictions.
Applause followed as representatives of the EU and Mercosur members Brazil, Argentina, Paraguay and Uruguay signed the accord at a ceremony in Paraguay’s capital, Asunción. After a quarter-century of talks, the deal was hailed by participants as “historic”.
STORY CONTINUES BELOW THIS AD
The signing represents a significant geopolitical success for the EU at a time marked by US tariffs and rising Chinese exports, reinforcing the bloc’s presence in a resource-rich region that has become a focal point of competition between Washington and Beijing.
It also signals South America’s determination to maintain a broad set of trade and diplomatic partnerships, even as US President Donald Trump asserts American dominance across the Western Hemisphere.
European Commission President Ursula von der Leyen, who heads the EU’s executive arm said the agreement’s “geopolitical importance cannot be overstated” at a moment when the benefits of free trade are again being questioned.
“We choose fair trade over tariffs. We choose a productive long-term partnership over isolation,” she declared at the ceremony attended by the presidents of Mercosur members Argentina, Uruguay and Paraguay, and by the foreign minister of the trading bloc’s biggest economy, Brazil.
“We will join forces like never before, because we believe that this is the best way to make our people and our countries prosper.”
Economic gains tempered by political hurdles and farmer backlash
In creating one of the world’s largest free trade zones, the accord — pushed by South America’s renowned cattle-raising countries and Europe’s industrial sectors craving new markets for cars and machines — brings together a market of more than 700 million consumers that accounts for a quarter of global gross domestic product.
After decades of delay, the politically explosive deal still must clear one final hurdle: ratification by the European Parliament. Powerful protectionist lobbies on both sides of the Atlantic, particularly European farmers scared of the possible dumping of cheap South American agricultural imports, have long sought to scupper the agreement and could still stall its implementation.
STORY CONTINUES BELOW THIS AD
Although the accord eliminates more than 90% tariffs on goods and services between the European and Mercosur markets, some tariffs will progressively be cut over 10-15 years and key farm products like beef will be limited by strict quotas in a bid to assuage European farmers’ fears.
Those quotas, as well as safeguard measures and generous EU subsidies to cash-strapped farmers, pushed agricultural powerhouse Italy across the line earlier this month. France, however, remains opposed to the accord.
With inputs from agencies
End of Article