European Union and Mercosur trade bloc announce free trade deal that’s 25 years in the making

MONTEVIDEO, Uruguay — The European Union and the Mercosur trade bloc have agreed to terms for a long-anticipated free trade deal, European Commission President Ursula von der Leyen announced in Montevideo on Friday.

The EU-Mercosur deal aims to create one of the largest free trade zones in the world, covering over 700 million people and nearly 25% of global GDP.

Much like the U.S.-Mexico-Canada free trade agreement, its goal is to reduce tariffs and trade barriers, making it easier for businesses on both sides to export goods.

Mercosur comprises Brazil — the lion’s share of the bloc’s territory, economic output and population — along with Argentina, Paraguay, Uruguay and Bolivia, the newest member. Venezuela’s membership has been suspended indefinitely.

The deal is not the end of the story for the Europeans. France leads a group of member countries who still have objections to the pact, and all 27 member countries must endorse it for the agreement to enter force.

In remarks aimed at her “fellow Europeans,” and perhaps those more skeptical like farmers in France and elsewhere, von der Leyen said it would have a positive impact on around 60,000 companies that export to the Mercosur region.

She said they will “benefit from reduced tariffs, simpler customs procedures and preferential access to some critical raw materials. This will create huge business opportunities.”

“And to our farmers,” she said, “we have heard you listen to your concerns, and we are acting on them. This agreement includes robust safeguards to protect your livelihoods.