European Union and Mercosur bloc of South American nations reach free trade agreement

The European Union and the Mercosur bloc of South American countries officially signed a free trade agreement Saturday, which concludes more than 25 years of negotiations.

The signing ceremony, held in Paraguay’s capital of Asunción, paves the way for what leaders hope will become one of the world’s largest free‑trade zones, linking the EU’s 27 member states with Argentina, Brazil, Paraguay and Uruguay. 

Combined, the deal’s partners encompass more than 700 million people and a global economic footprint exceeding $25 trillion in GDP.

European Commission President Ursula von der Leyen hailed the agreement as a victory for multilateral trade in an era of rising protectionism, saying it underscores a shared commitment to open markets and long‑term partnerships. 

South American leaders, including Brazil’s Luiz Inácio Lula da Silva, described the pact as a historic opportunity to expand exports and integrate regional industries with European markets.