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.

Portuguese Prime Minister António Costa defended the EU–Mercosur agreement as a historic deal and rejected European criticism as based on a “totally wrong perception”. Costa framed the pact as both a trade and an investment agreement, arguing it does not simply favour Europe. His remarks come after the 27 EU member states reached a qualified majority to approve the accord; Brazil’s president Jair Bolsonaro? No — the content states Brazil’s president Luiz Inácio Lula da Silva will not attend the signing ceremony in Paraguay as the long-delayed pact moves into the ratification phase in Europe.

Update: Diário de Notícias reports that António Costa will attend the signing ceremony in Asunción and reiterated that concerns about farmers’ opposition are misplaced, saying the agreement includes safeguards for European agriculture.

Update 2: Additional coverage quotes Costa saying criticisms rest on a “completely wrong perception” and using the image of the EU and Mercosur “building bridges” rather than raising barriers; RTP and Expresso note he continues to portray the pact as both trade and investment, emphasising expected benefits for Portuguese exporters.

The EU–Mercosur agreement will create clear winners and losers in agriculture: EU wine and olive oil producers stand to gain improved access and competitive opportunities, while beef, rice, sugar and honey are likely to face the greatest pressure from increased imports and tariff concessions. Farmers warn of 'unfair competition' and say small family farms risk bankruptcy unless safeguard clauses are rigorously enforced, with transparent monitoring, clear trigger mechanisms and targeted support measures. The agreement therefore raises political and policy questions about enforcement, compensation and the protection of vulnerable rural sectors.

The European Commission president will sign the EU–Mercosur trade agreement on Saturday, 17 January, the EU confirmed. The deal is expected to lower trade barriers between the EU and South American Mercosur countries; coverage focuses on the formal signature rather than implementation details. For expats in Portugal, the immediate effect will be minimal day-to-day, but the agreement could influence prices, imports and export opportunities over time.