After more than a quarter-century of attempts and negotiations, the agreement materialized in the Paraguayan capital. The host president, Santiago Peña, celebrated the milestone, highlighting the parties' ability to be "pragmatic, flexible and transcend conjunctural differences." The strategic association, representing nearly 25% of global wealth, will begin operating provisionally when approved by one South American bloc country.
“"We have chosen collaboration over isolation. We will join our forces like never before."
The agreement provides for the progressive elimination of over 90% of tariffs between the 31 countries involved. The EU estimates that its exports to Mercosur will increase by 39% by 2040, with an annual saving of 4 billion euros in tariffs for European companies. The most benefited sectors are automotive, chemical, pharmaceutical, and high-value products such as wine and cheese.
Despite the signing, a tense ratification process is expected in the EU, with strong opposition from the European agri-food sector, concerned about the entry of specific quotas for meat, sugar, and rice. Five member countries (France, Hungary, Poland, Ireland, and Austria) previously voted against it. Furthermore, the pact occurs in a context of geopolitical rivalry with the US and China, the latter being the main trading partner of the South American bloc.
