Ane Barcos/Eduardo González
Paraguay will host the signing of the free trade agreement between the European Union and Mercosur next Saturday, January 17. Negotiations for over 25 years took place after the EU reached a consensus last Friday. Prime Minister Pedro Sánchez celebrated the upcoming signing on Monday, stating that “while others build walls or are absorbed in their own economies,” and Foreign Minister José Manuel Albares described it as “a great historic step.”
The signing of the agreement will take place in Asunción on Saturday, January 17, with the participation of the foreign ministers of the Mercosur member states, as well as the President of the European Commission, Ursula von der Leyen, and the President of the European Council, António Costa.
The agreement between the Mercosur bloc, composed of Argentina, Brazil, Paraguay, and Uruguay, and the European Union was reached in December 2024. However, it wasn’t until January 2026 that the EU member states gave it the green light.
Last Friday, January 9, the European Union ambassadors adopted the decision authorizing the signing of the trade agreement, despite opposition from France, Poland, Ireland, Austria, and Hungary, who voted against it. Belgium abstained, while the rest of the countries gave their support.
Italy, which had been one of the countries that blocked the vote in December 2025 due to concerns about the agreement’s impact on its agriculture, changed its position after the European Commission proposed a €45 billion modernization fund.
The agreement between the European Union and Mercosur will open access to a market of 780 million people, representing approximately 25% of global GDP. The elimination or reduction of up to 90% of bilateral tariffs aims to foster increased trade and investment between the two blocs, with a special focus on small and medium-sized enterprises (SMEs).
Furthermore, the European Union has indicated that the agreement aims to promote shared values and sustainable development, with an emphasis on strengthening labor rights, combating climate change, protecting the environment, and promoting responsible business practices. Although the signing is scheduled for Saturday, the agreement still needs approval from the European Parliament before it can be formalized.
Sánchez and Albares
Speaking to the press after meeting with the Prime Minister of Greece, Kyriakos Mitsotakis, at the Moncloa Complex, Sánchez celebrated on Monday the consensus reached last Friday and the upcoming signing of the trade agreement between Europe and Mercosur.
“While others build walls or become absorbed in their own economies, I believe that the European Union-Mercosur agreement opens a path to creating a free trade area that will undoubtedly be the largest in the world and, therefore, the one that will guarantee us greater cooperation, greater trust, and greater shared prosperity with a region as important to European interests as Latin America and the Caribbean.”
“It will be a key agreement in economic terms, with estimated savings, according to studies, of more than 4 billion euros annually in tariffs for our companies, and essential from the current geopolitical perspective, advocating for an international order based on rules, norms, and predictability that allow us to build shared prosperity,” he added.
For his part, Albares asked “all Spaniards” to be “aware of the great historical step we have taken, especially at this time,” because it will allow the creation of “the largest free trade area, encompassing 700 million people,” and will represent “a “There will be overall gains for both continents, but due to the size and reduction of the market, the gains will be around 70% for Europeans.”
“Let’s not forget something else: this is a trade agreement, but above all, it is also the political commitment we are offering to those Latin American countries,” the “most Euro-compatible region, closest in values to Europe,” the minister continued, assuring that the Spanish government “will support any sector that may be” affected by the agreement.