Paraguay Completes Historic Trade Deal Between South America and Europe

Paraguay has become the last South American nation to approve a massive trade agreement between Mercosur and the European Union. The deal creates one of the world's largest free trade zones covering over 700 million people and 25% of global economic output.

SANTIAGO, Chile — Paraguay’s legislature has given final approval to a historic trade agreement between South American nations and the European Union, completing a 25-year negotiation process that will create one of the planet’s most expansive free trade zones.

On Tuesday, all 58 Paraguayan representatives present during the voting session unanimously endorsed the Mercosur-European Union trade pact. The approval came nearly two weeks following the Senate’s endorsement and now awaits President Santiago Peña’s signature to become official.

This milestone makes Paraguay the fourth and last founding member of Mercosur to ratify the comprehensive agreement, joining Uruguay, Argentina, and Brazil in approving the deal. The European Commission has indicated it will provisionally implement the agreement while European lawmakers pursue a legal challenge through the European Court of Justice.

The trade pact encompasses regions housing more than 700 million residents and represents 25% of the world’s total economic output. Bolivia, which recently joined Mercosur, did not take part in the original negotiations but will have the opportunity to participate in future years.

Deputy Rodrigo Gamarra, a member of the governing Colorado Party and current leader of the Mercosur Parliament, called the development groundbreaking. “This is a historic agreement for Paraguay, for the region, and for the world. We are creating what is possibly the largest market in the world,” Gamarra stated.

The legislative session extended beyond nine hours, with lawmakers highlighting the potential benefits the agreement will bring to both trading blocs. Colorado Party Deputy Juanma Añazco described the arrangement as crucial for future cooperation, saying “This provisional agreement is the bridge to full integration.”

Another ruling coalition member, Deputy Alejandro Aguilera, emphasized the significance of reaching this point after decades of discussions. “It was years and years of negotiations and reluctance … achieving this is truly historic,” Aguilera commented.

Opposition lawmakers also voiced support for the trade deal, with independent Deputy Raúl Benítez stating that “where there is isolation, we respond with multilateralism.”

Paraguay’s approval concludes the ratification process for all South American participants in the agreement. Uruguay initiated the approval wave in late February, with Argentina completing its ratification the same day through substantial majorities in both legislative chambers. Brazil, representing Mercosur’s largest economy, followed suit in early March with unanimous Senate approval after lower house endorsement.

Unlike the South American process, the European Union’s 27 member nations do not require individual legislative approval for the major trade agreement. However, the European Parliament will conduct another ratification vote once the ongoing court case determines whether the deal violates EU treaties.

The agreement faces resistance from France, left-wing organizations, and agricultural unions, who contend it will harm European farming interests.

This trade pact emerges during a period of global political division and economic uncertainty, as several European countries confront security threats and navigate strained relationships with the United States.

European Commission President Ursula von der Leyen, working alongside Brazilian President Luiz Inácio Lula da Silva, served as a key advocate for the agreement. Von der Leyen has characterized it as “one of the most significant trade agreements of the first half of this century.”

“Mercosur embodies the spirit with which Europe operates on the global stage. Europe is strengthening itself and gaining independence,” von der Leyen declared in her statement.