EU and Mercosur leaders after signing the trade agreement. Asuncion, Paraguay. January 17, 2026. Photo credit: Jorge Saenz / AP / Profimedia
“Fair trade, rather than tariffs”, declared Saturday in Asuncion, Paraguay, the president of the European Commission, Ursula von der Leyen, as she prepared to sign the trade agreement between the European Union (EU) and Mercosur (Argentina, Brazil, Paraguay and Uruguay), reports France Presse and Agerpres.
This is a “clear signal in favor of international trade” in a context of “tensions”, said the president of Paraguay, Santiago Pena, whose country holds the rotating presidency of Mercosur.
The EU-Mercosur trade agreement signed on Saturday in Asuncion marks the end of 25 years of negotiations between the European Union and the Mercosur states and the official creation of one of the largest free trade areas in the world, with over 700 million inhabitants, representing 30% of global GDP.
“We choose fair trade over tariffs, a long-term productive partnership over isolation. And above all, we intend to bring concrete and tangible benefits to our citizens and companies,” Von der Leyen added.
25 years in the making.
The EU-Mercosur agreement is the achievement of a generation.
For the benefit of generations to come.
Long live the friendship between our people and our continents. https://t.co/2EOnBo9V3v
— Ursula von der Leyen (@vonderleyen) January 17, 2026
This agreement eliminates tariffs on more than 90% of trade and boosts European exports of cars, machinery, chemicals, wines and spirits. In return, it facilitates access to the European market for meat, sugar, rice, honey and soybeans from South America.
His signing comes as US President Donald Trump has raised numerous tariffs over the past year.
Major protests against this treaty have taken place in several EU countries, while large parts of civil society in Mercosur countries also oppose the agreement.
Ursula von der Leyen signs the EU-Mercosur agreement in Paraguay on Saturday. When will it come into force and who can still block it
The signing of the agreement is the culmination of an official visit by the President of the European Commission to South America. On the eve of the ceremony, Ursula von der Leyen was in Rio de Janeiro, where she met with the president of Brazil, Luiz Inacio Lula da Silva. Brazil is a strategic partner of the European Union, with bilateral cooperation intensifying in recent years in key areas such as trade and combating climate change.
What is Mercosur?
Mercosur is the Southern Common Market, a South American trading bloc established in 1991. Its full members are Argentina, Brazil, Paraguay and Uruguay.
Venezuela joined in 2012, but its membership was suspended in 2017.
In December 2012, the Protocol of Bolivia's accession to Mercosur was signed. This protocol is currently being ratified by the parliaments of the Mercosur countries.
Together, the Mercosur countries form the 6th largest economy in the world, with a total population of 270 million inhabitants.
