After 25 years of negotiations, the European Union and Mercosur have signed a comprehensive trade agreement in Paraguay that aims to create the world’s largest free-trade area, covering more than 700 million consumers. The deal opens markets for European exports — including vehicles, machinery, wines, spirits, olive oil and cheese — and is welcomed by business groups such as Portugal’s CIP and the Portuguese government as a major opportunity for economic growth on both sides of the Atlantic. Implementation and regulatory alignment will be crucial for the agreement to deliver its projected benefits and reshape transatlantic trade flows.

Update: The signing ceremony took place in Asunción, Paraguay; EU leaders including European Commission President Ursula von der Leyen and European Council President António Costa attended, while Brazil’s president Luiz Inácio Lula da Silva did not attend and was represented by his foreign minister, Mauro Vieira. Portuguese media note the pact covers more than 700 million consumers and highlights Portuguese exporters (wines, olive oil, cheese) as well placed to gain access — but national ratification and regulatory alignment are still required before trade changes take effect.

Update 2: Multiple outlets report the formal signatories included Mercosur members such as Argentina, Brazil, Paraguay and Uruguay, and the EU delegation included the European Commissioner for Trade Maroš Šefčovič. Ursula von der Leyen framed the pact as a choice for “fair trade rather than tariffs.” The agreement still requires national ratification and technical regulatory alignment before market changes apply.