In the presence of Milea and the absence of Lula, Mercosur and the EU sign a landmark agreement in Asuncion
Milei called the deal “the most important success in the history of Mercosur” and said Argentina would continue to pursue other trade initiatives beyond the EU agreement.
The European Union and South American bloc Mercosur signed the long-negotiated Association and Free Trade Agreement in Paraguay on Saturday, with Argentina’s President Javier Milei and Brazil’s absentee Luiz Inácio Lula da Silva, represented by his foreign minister, attending the ceremony.
The signing took place at the Theater of the Central Bank of Paraguay in Asunción. In the agreed format for the event, the agreement was formally signed by Mercosur’s foreign ministers and EU Trade Commissioner Maroš Šefčovič.
Statement by leaders at the ceremony
Milei called the deal “the most important achievement in the history of Mercosur” and said Argentina would pursue other trade initiatives beyond the EU agreement, according to Argentine news.
European Commission President Ursula von der Leyen described the pact as a broader platform for cooperation, while European Council President António Costa said the deal covers more than 700 million people in both regions.
Paraguayan President Santiago Peña, who hosted the summit as rotating chairman of Mercosur, argued that Europe and South America should “unite” in a “complex, unstable” world, according to local media.
What the deal does
The deal aims to phase out tariffs on more than 90% of bilateral trade and would create one of the world’s largest integrated free trade areas with a combined market of roughly 720 million people.
EU-Mercosur trade will reach around €111 billion in 2024, with EU exports concentrated in machinery, chemicals and other industrial goods, while Mercosur’s exports are dominated by agricultural products and minerals.
Lula’s absence and the call for ratification
Lula’s decision not to wait became a central political detail. AFP, citing a presidential source, said the Brazilian president would not go to Paraguay for the signing. Brazil would be represented by its foreign minister, although Lula has publicly defended the deal’s economic potential.
Ratification remains uncertain. Reuters reported that the deal still needs to be approved by the European Parliament and the legislatures of Mercosur’s full members (Argentina, Brazil, Paraguay and Uruguay). European farmers and environmental groups have expressed concern about increased imports from South America and environmental impacts, including deforestation.
Signature vs. entry into force
On the EU side, the Council adopted decisions authorizing the signing of the Comprehensive Partnership Agreement and the Interim Trade Agreement, which aim to strengthen the trade pillar as the wider treaty progresses through political steps.
Regional reports in South America emphasized that the details of implementation – technical standards, sectoral guarantees and domestic adaptation measures – will be shaped during the ratification phase and subsequent regulatory work in each member state.
International context
AP described the signing as coming at a time of heightened global trade tensions as the EU seeks to strengthen its strategic and economic footprint in South America.
EFE he also presented the deal as the culmination of 26 years of negotiations, with the process still facing political hurdles and internal debates – particularly in Europe – before it takes effect.
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