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EU and Mercosur Sign Landmark Trade Agreement in Paraguay

Published January 18, 2026, 08:11
EU and Mercosur Sign Landmark Trade Agreement in Paraguay

The European Union and Mercosur signed a cooperation agreement and a temporary trade agreement in Asunción, Paraguay, marking a new era in their economic and geopolitical relations. The signing was attended by European Commission President Ursula von der Leyen and European Council President Antonio Costa. The agreement creates one of the largest trade zones in the world, with access to approximately 700 million consumers. The Commission estimates that the agreement will increase the EU's annual exports to Mercosur by 39%, or around €49 billion, and will support hundreds of thousands of jobs in Europe. Beyond the economic benefits, the agreement is considered a strong geopolitical message in favor of multilateralism and the rule-based international system. Von der Leyen stated that the agreement opens a new chapter of opportunities for over 700 million citizens, offering economic, diplomatic, and geopolitical benefits to both sides. The agreement will eliminate tariffs and trade barriers, open up public procurement, and provide a clear regulatory framework to encourage investment. Costa emphasized that the agreement is not only for businesses but also for citizens, creating a free trade zone that will bring prosperity. He stressed the need to build bridges and alliances, rather than impose trade barriers, and highlighted that the agreement will strengthen the EU's economic security through access to new markets and reduced dependencies.

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