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EU and Mercosur Sign Landmark Trade Agreement in Paraguay

Published January 18, 2026, 08:22
EU and Mercosur Sign Landmark Trade Agreement in Paraguay

The European Union and Mercosur have signed a cooperation agreement and a temporary trade agreement in Asunción, Paraguay, marking a new era in their economic and geopolitical relations. The agreement, signed by Antonio Costa and Ursula von der Leyen, creates one of the world's largest trade zones, with access to approximately 700 million consumers. The Commission estimates that the agreement will increase EU exports to Mercosur by 39%, or about €49 billion annually, and support hundreds of thousands of jobs in Europe. European Commission President Ursula von der Leyen emphasized that the agreement represents an opportunity for over 700 million citizens, offering economic, diplomatic, and geopolitical benefits. She highlighted that the agreement will remove trade barriers, open access to public procurement, and create a clear regulatory framework to encourage investment, particularly benefiting the 30,000 European SMEs already exporting to the region. Furthermore, von der Leyen stated that the agreement will support the efforts of both regions to protect the environment and address climate change, with commitments to climate neutrality and sustainable development. The agreement is seen as a strong message in favor of multilateralism and the rule-based international system in a time of global uncertainty. European Council President Antonio Costa stated that the agreement will bring prosperity, not dependence, and that the EU chooses cooperation over competition and unity over polarization. He emphasized that the agreement strengthens the EU's economic security by opening new markets and reducing excessive dependencies.

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