In Paraguay’s capital, Asunción, the European Union and the South American trade bloc Mercosur formally signed a long-anticipated free trade agreement, bringing to a close more than twenty-five years of complex and often difficult negotiations. The agreement aims to deepen commercial cooperation at a time when global protectionism and trade tensions are on the rise.
The signing ceremony in the hot and humid capital marked a significant geopolitical achievement for the European Union. The deal enhances the EU’s position in a resource-rich region that has increasingly become a focal point of strategic competition between the United States and China.
The agreement also sends a clear signal that South American nations intend to maintain diversified trade and diplomatic relationships, despite statements by U.S. President Donald Trump asserting American dominance in the Western Hemisphere.
European Commission President Ursula von der Leyen, who leads the EU’s executive arm, emphasized that “the geopolitical importance of this agreement cannot be overstated,” particularly at a moment when skepticism toward free trade is re-emerging in many parts of the world.
Notably, as the ceremony was getting underway, President Trump announced the introduction of 10 percent tariffs on eight European countries, citing their opposition to American control over Greenland.
“We choose fair trade over tariffs. We choose a productive, long-term partnership over isolation,” von der Leyen stated during the event.
The ceremony was attended by the presidents of Mercosur member states Argentina, Uruguay, and Paraguay, as well as the foreign minister of Brazil, the bloc’s largest economy.