British News Agency

EU President Ursula von der Leyen emphasized on Saturday that by signing a major trade agreement with South America’s Mercosur countries, which has been under negotiation for 25 years, the European bloc has chosen “fair trade instead of tariffs.”

Speaking at the ceremony in Asunción, Paraguay, von der Leyen said: “We chose fair trade instead of tariffs, and a productive and long-term partnership instead of isolation.”

European Council President António Costa said the agreement sends “a message in defense of free trade based on rules, multilateralism, and international law.”

Costa noted that the agreement stands in opposition to “the use of trade as a geopolitical weapon.”

The Mercosur agreement, negotiated for more than 25 years, will create a free trade area of around 700 million people and will gradually eliminate approximately 90% of customs duties in the industrial, services, and agricultural sectors.

The European Commission estimates that EU companies will save more than €4 billion per year in customs duties. Mercosur countries also committed to opening their public procurement markets to European firms under the same conditions as domestic competitors.

The agreement предусматри recognizes 344 “geographical indications” protecting European products from imitation and also aims to secure the supply of critical minerals, reducing the EU’s dependence on China.

However, the agreement has highlighted divisions within the bloc.

Supporters led by Germany and Spain argue that the EU needs new trade ties as the United States closes its market and China pursues an increasingly aggressive trade policy. Opponents led by France say the agreement threatens European farmers by exposing them to unfair competition from Latin American imports.

Mercosur is the Southern Common Market, a South American trade bloc established in 1991. Its members are Argentina, Brazil, Paraguay, and Uruguay. Venezuela joined in 2012, but its membership was suspended in 2017. In December 2012, the Protocol of Accession of Bolivia to Mercosur was signed, and it awaits ratification by the parliaments of Mercosur countries.

Together, Mercosur countries form the world’s sixth-largest economy, with a combined population of around 270 million.