By Carlos Meneses
Asunción (EFE).- The European Union and Mercosur signed an ambitious free trade agreement on Saturday, creating the world’s largest free trade zone, a historic event that occurs amid the new tariff offensive by United States President Donald Trump.
The signing ceremony of the trade treaty, which was negotiated for 26 years, was attended by the leadership of the community bloc, led by the President of the European Commission, Ursula von der Leyen, and five Latin American leaders.
European Commissioner for Trade Maroš Šefčovič and the foreign ministers of the Mercosur countries, Pablo Quirno (Argentina), Mauro Vieira (Brazil), Rubén Ramírez (Paraguay), and Mario Lubetkin (Uruguay), signed the pact at an event in the headquarters of the Central Bank of Paraguay before hundreds of guests.
“We often use adjectives lightly, but today is not the case. We are witnessing a historic moment long-awaited by our peoples as we unite two of the world’s most significant markets: Europe and South America,” said Paraguay’s President, Santiago Peña, whose country holds the rotating presidency of Mercosur.
In her speech, Von der Leyen emphasized that the document commits to “fair trade” and a long-term partnership, as opposed to the “tariffs” and “isolation” promoted by some countries.
“This agreement sends a very strong message to the world. It reflects a clear and deliberate choice. We choose fair trade over tariffs. We choose a productive, long-term partnership over isolation,” she said.
The President of the European Council, António Costa, told his South American partners that the EU does not seek “spheres of influence” or domination, but rather aims to promote “spheres of prosperity” amid the expansionist zeal of powers such as the US and Russia.
The pact is a milestone for both sides, as it will establish a free trade zone encompassing 720 million people and an economic output of 22 trillion dollars, a quarter of the global GDP.
It will gradually reduce or eliminate tariffs on about 90% of exports and imports. For example, the EU expects to save 4.6 billion dollars per year in customs tariffs with the agreement.
It is a light amidst a “turbulent” world
At the signing, the presidents of Argentina (Javier Milei), Uruguay (Yamandú Orsi), Panama (José Raúl Mulino), and Bolivia (Rodrigo Paz) were also present. Panama recently joined Mercosur as an associate state, and Bolivia is nearing the end of its process to become a full member.
They all agreed on the same diagnosis and offered the same solution for this “volatile” and “turbulent” world where past certainties no longer exist: more trade against protectionism.
Orsi and Milei were also among the most emphatic in urging Mercosur, founded in 1991 at the same headquarters of the Paraguayan Central Bank, to deepen its integration process and adapt its negotiation mechanisms to the speed of the global economy.
“Closure and protectionism sheltered by rhetoric are the main causes of economic stagnation and the growth of poverty,” declared the Argentine president.
Milei also dedicated part of his speech to applauding Trump after the US bombed Venezuela on Jan. 3 and captured Venezuelan President Nicolás Maduro, whom Milei described as a “narcoterrorist.”
Lula’s absence
The most notable absence was that of Brazilian President Luiz Inácio Lula da Silva, a staunch supporter of the agreement who did not attend due to a last-minute protocol change.
According to Brazilian officials, the event was scheduled to be held at the ministerial level. However, Peña invited the presidents due to the event’s significance.
“His absence leaves a bittersweet taste, but we cannot fail to recognize President Lula’s leadership in carrying out the negotiations,” Peña said at a press conference after the signing. EFE
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