Paraguay’s Vote Seals Mercosur Side of EU Trade Pact

The Mercosur EU trade deal has now been ratified by every founding member of the South American bloc. Paraguay’s Chamber of Deputies voted unanimously on March 17 — all 58 legislators present — completing a process that Uruguay, Argentina, and Brazil had finished in preceding weeks.

The Rio Times, the Latin American financial news outlet, examines what the vote means for a pact that would create the world’s largest free trade zone but still faces fierce resistance in Europe — from French farmers, from the European Parliament, and now from the EU’s own courts.

South America’s Side Is Done

The agreement was signed on January 17 in Asunción after nearly three decades of negotiations. It covers a combined market of approximately 720 million people and $22 trillion in GDP, eliminating tariffs on more than 90% of bilateral trade in agriculture, automotive, pharmaceuticals, and services.

Paraguay’s Congress highlighted benefits specific to the country: zero-tariff export quotas for certain products, relaxed rules of origin to ease access to the European market, and extended timelines to adapt to EU sanitary standards. President Santiago Peña said the deal “marks a milestone for our economy” and would generate jobs and innovation “from the heart of South America.”

Brazil promulgated its own ratification decree on the same day, with Vice President Geraldo Alckmin formally notifying Brussels. Bolivia, which recently joined Mercosur, did not participate in the original negotiations but may accede to the pact in coming years.

Europe Is the Mercosur EU Trade Deal Battleground

The European Commission under Ursula von der Leyen triggered provisional application of the trade pillar on February 26, after Argentina and Uruguay completed ratification. Von der Leyen declared: “When they are ready, we are ready.” Germany and Italy backed the move, with Berlin calling it “the hour of Europe.”

France disagrees violently. President Emmanuel Macron called the Commission’s decision “a bad surprise” and accused Brussels of acting unilaterally without waiting for the European Parliament’s vote.

French farmers fear devastation in beef, poultry, and sugar beet — sectors where South American producers are dramatically cheaper. Jordan Bardella of the National Rally called it “a forced act against the European Parliament and a blow to France.”

The European Parliament itself added another obstacle in January, voting 334-324 to refer the deal to the EU Court of Justice for a legality review. The court must rule on whether splitting the agreement into commercial and political pillars — a tactic that bypasses national parliaments — is compatible with EU treaties. That review could take up to 18 months.

Why It Matters for Latin America

The deal’s timing is inseparable from the Trump tariff escalation. With the United States imposing duties on European and South American goods, both sides need alternatives.

For the EU, Mercosur offers supply chain diversification away from dependence on China and a volatile Washington. For South America, guaranteed access to a 450-million-consumer market reduces the risk of growing Chinese dependency.

Under provisional application rules, tariff reductions between the EU and individual Mercosur signatories begin on the first day of the second month after both sides exchange notifications. Argentina and Uruguay could begin operating under preferential terms within weeks.

South America has done its part. The fate of what could be the most consequential trade agreement of the decade now rests entirely on whether Europe’s institutions can overcome their own divisions before geopolitical reality makes the choice for them.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error