In a landmark ceremony held in Asunción on January 17, 2026, the European Union and the Southern Common Market (Mercosur) formally signed one of the world’s most comprehensive free trade agreements, culminating negotiations that spanned more than two decades. The signing event brought together top leadership from both blocs, including European Commission President Ursula von der Leyen, European Council President Antonio Costa, and representatives from Mercosur’s core member states.
The agreement establishes a transformative economic framework between the two regions, which together represent a market of over 700 million people. The pact will progressively eliminate tariffs on numerous goods, with the European Commission projecting annual duty savings exceeding €4 billion on EU exports alone. Key EU exports to Mercosur include machinery, chemical products, and transport equipment, while South American exports predominantly feature agricultural commodities, minerals, and forestry products.
The negotiation journey, which began in the late 1990s, encountered multiple obstacles including political shifts in South American governments, environmental protection concerns, and resistance from European agricultural sectors. The final agreement includes provisions addressing sustainable development and environmental standards, reflecting contemporary trade priorities.
The pact now advances to the ratification phase, requiring approval from the European Parliament and the national legislatures of Mercosur’s member countries: Argentina, Brazil, Paraguay, and Uruguay.