On Saturday, January 17, 2026, the countries Latin Americans, Mercosur and the European Union signed in Paraguay a treaty creating one of the largest free trade areas in the world. This agreement was signed after more than 25 years of negotiations.

The European Union (EU) and Mercosur (abbreviation of the “Southern Common Market”), an economic alliance created in 1991 and bringing together Brazil, Argentina, Paraguay, Paraguay, Uruguay and Bolivia, have signed a free trade agreement that de facto creates one of the largest areas of free trade in the world. Together, these represent 30% of global GDP and have more than 700 million consumers. The deal had been negotiated ever since 1999 between the EU and the founding countries of Mercosur (Argentina, Brazil, Paraguay, Uruguay).
Despite the opposition of several, including France, a majority of European states recently supported it.

And numerous protests against this treaty have took place in several EU countries, while large sections of companies civilians from Mercosur countries are also opposed to it.

This treaty eliminates customs duties on more than 90% of bilateral trade and promotes European exports of cars, machines, chemical products, wines and spirits. In return, it facilitates access to the European market for beef, poultry, sugar, rice, honey and South American soybeans, with quotas for duty-free products that alarm sectors concerned.

According to the president of European Council, António Costa, the agreement sent “a message of defense free trade, based on rules, multilateralism and law international as the basis for relationships between countries and regions”, which Contrast with “the instrumentalization of trade for purposes geopolitics”.