EU and South America to sign massive trade deal Saturday

The European Union and Mercosur trade bloc will sign a historic trade agreement on Saturday in Asunción, Paraguay, creating one of the world's largest free trade zones. The deal—25 years in the making—covers 30% of global GDP and over 700 million consumers, eliminating tariffs on 90% of bilateral trade. European exports like cars and wine gain easier access to South American markets, while Mercosur countries (Argentina, Brazil, Uruguay, Paraguay) can export beef, sugar, rice, and soy to Europe more freely.

The agreement faced fierce opposition from European farmers and nations like France, Ireland, Poland, and Hungary, who fear cheaper South American products will flood markets. The European Commission announced a crisis fund and safeguards to suspend tariffs if imports surge and damage local agriculture. Despite this, the deal proceeded after Italy dropped its objections.

The pact is seen as establishing a "third way" between US and Chinese trade dominance, particularly as Donald Trump's tariff-heavy policies create global uncertainty. After signing, both Mercosur members and the European Parliament must still ratify the deal—passage in the European Parliament is not guaranteed.

With protests continuing across France and other European nations, the final ratification process will determine whether this 26-year negotiation ultimately becomes reality.

SOURCE: https://www.channelstv.com/2026/01/15/long-awaited-eu-mercosur-trade-pact-set-for-signing/