economy
January 18, 2026
European Union and Mercosur bloc of South American nations sign landmark free trade agreement
ASUNCIÓN, Paraguay (AP) — The European Union and the Mercosur bloc of South American countries formally signed a long-sought landmark free trade agreement on Saturday, capping more than a quarter-century of torturous negotiations to strengthen commercial ties in the face of rising protectionism and trade tensions around the world.
TL;DR
- The EU and Mercosur have formally signed a free trade agreement after more than 25 years of negotiations.
- The agreement aims to strengthen commercial ties and counter rising protectionism globally.
- It establishes one of the world's largest free trade zones, benefiting over 700 million consumers.
- The deal still requires ratification by the European Parliament.
- Potential opposition exists from European farmers concerned about agricultural imports and from political figures like France's President Emmanuel Macron.
- Tariffs will be eliminated on over 90% of goods and services, with gradual reductions over 10-15 years.
- Limits and quotas are in place for certain farm products, such as beef, to address farmers' concerns.
- EU subsidies are also being provided to farmers to help alleviate concerns.
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