### EU and Mercosur Sign Landmark Trade Deal After 25 Years of Negotiations The European Union (EU) and the South American trade bloc Mercosur have officially signed a significant free trade agreement in Asunción, Paraguay, marking the culmination of 25 years of complex negotiations. This landmark deal aims to reduce tariffs and enhance trade relations between the two regions, creating one of the world's largest free trade areas. The agreement now awaits ratification from the European Parliament and the legislatures of Mercosur member countries: Argentina, Brazil, Paraguay, and Uruguay [https://www.tbsnews.net/worldbiz/europe/eu-and-mercosur-sign-trade-deal-after-25-years-negotiations-1337036][https://www.japantimes.co.jp/business/2026/01/18/economy/eu-mercosur-trade-deal]. ### Structure of the Trade Agreement and Its Implications 1. **Background of Negotiations**: - The trade deal has been in the works for over two decades, with various challenges and delays primarily due to differing agricultural standards and protectionist sentiments in Europe [https://www.devdiscourse.com/article/business/3773662-eu-mercosurs-landmark-free-trade-triumph-a-counter-to-global-protectionism]. 2. **Key Features of the Agreement**: - The deal promises to eliminate tariffs on over 90% of goods traded between the EU and Mercosur, significantly lowering costs for consumers and businesses [https://www.worldwidenews.ca/eu-mercosur-pact-creates-major-free-trade-zone]. - It is expected to enhance trade in agricultural products, particularly benefiting South American countries known for their beef and soy exports [https://www.euronews.com/video/2026/01/17/eu-and-mercosur-sign-major-trade-deal-in-asuncion]. 3. **Geopolitical Context**: - The agreement is seen as a strategic move by the EU to strengthen its economic ties in South America amid rising global protectionism and trade tensions, particularly with the United States and China [https://www.devdiscourse.com/article/business/3773545-historic-eu-mercosur-agreement-ushers-new-trade-era]. - The signing ceremony featured notable political figures, including Argentina's President Javier Milei, while Brazil's President Luiz Inácio Lula da Silva was absent, highlighting ongoing tensions within the bloc [https://en.mercopress.com/2026/01/18/with-milei-present-and-lula-absent-mercosur-and-eu-sign-landmark-deal-in-asuncion]. ### Supporting Evidence and Data - **Trade Impact**: - The agreement is projected to create a free trade zone encompassing over **700 million consumers**, significantly boosting economic growth in both regions [https://www.hindu.com/news/international/eu-mercosur-bloc-of-south-american-nations-sign-landmark-free-trade-agreement/article70521129.ece]. - **Tariff Reductions**: - More than **90% of tariffs** on goods traded between the EU and Mercosur will be eliminated, facilitating cheaper imports and exports [https://www.gamereactor.eu/eu-and-mercosur-seal-landmark-trade-deal-after-25-years-of-talks-1662433]. ### Conclusion: A New Era of Trade Relations In summary, the EU-Mercosur trade agreement represents a significant milestone in international trade, reflecting a commitment to **fair trade over tariffs** and a strategic partnership aimed at countering global protectionism. The successful ratification of this deal will depend on the political dynamics within the European Parliament and the Mercosur member states. 1. **Major Takeaway**: The agreement is a response to rising global protectionism and aims to enhance economic cooperation between Europe and South America. 2. **Next Steps**: The deal must be ratified by the European Parliament and the legislatures of Mercosur countries, which may face challenges from protectionist lobbies [https://www.devdiscourse.com/article/business/3773545-historic-eu-mercosur-agreement-ushers-new-trade-era].