EU, Mercosur bloc sign free trade deal after 25 years of negotiations

European and South American leaders say pact sends ‘clear signal’ amid concerns over global tariffs, isolationism.Published On 17 Jan 2026European and South American officials have signed a major free trade agreement, paving the way for the European Union’s largest-ever trade accord amid tariff threats and deepening uncertainty around global cooperation.The deal finalised on Saturday between the 27-nation EU and South America’s Mercosur bloc creates one of the world’s largest free trade areas after 25 years of negotiations.Recommended Stories list of 3 itemslist 1 of 3EU states’ nod on Mercosur trade deal ends 25-year waitlist 2 of 3EU-Latin America trade deal: Who wins?list 3 of 3Thousands of Irish farmers protest EU’s Mercosur trade dealend of listThe agreement, designed to lower tariffs and boost trade between the two regions, must now gain the consent of the European Parliament and be ratified by the legislatures of Mercosur members Argentina, Brazil, Paraguay and Uruguay.“We choose fair trade over tariffs, we choose a productive long-term partnership over isolation,” EU chief Ursula Von der Leyen said at the signing ceremony in Paraguay’s capital, Asuncion.Paraguay’s President Santiago Pena also praised the treaty as sending “a clear signal in favour of international trade” in “a global scenario marked by tensions”.Brazilian Foreign Minister Mauro Vieira said it was a “bulwark … in the face of a world battered by unpredictability, protectionism, and coercion”.EU and Mercosur leaders pose for a group photo during the meeting to sign the free trade deal in Asuncion, Paraguay, January 17, 2026 [Jorge Saenz/AP Photo]The deal received a greenlight from most European nations last week, despite opposition from farmers and environmental groups, who have raised concerns over a surge of inexpensive South American imports and increased deforestation.