Asunción prepares to host the signing of the Mercosur–European Union free trade agreement on 17 January, 2026. The ceremony marks a milestone after more than 25 years of negotiations. The Mercosur-EU trade agreement links South America with one of the world’s largest consumer markets. Moreover, it reinforces Paraguay’s role as a regional diplomatic hub.
President Santiago Peña highlights the symbolic value of the moment. He recalls that Asunción hosted the birth of Mercosur in 1991. “This is a landmark step that marks the start of a new stage for our region,” said the President on his X account. Consequently, expectations are high among policymakers, producers, and investors.
The agreement opens access to more than 450 million European consumers. It also strengthens preferential market access for regional exports. In addition, the agreement promotes investment, technology transfer, and stable trade rules. These changes aim to support long-term sustainable development.
Economic opportunities for Paraguay
Paraguay’s productive sector stands to benefit significantly from the agreement. Peña explains that local grain and meat producers have proven their competitiveness and quality. “The agreement is an advantage for Paraguay.” Therefore, the Government views the signing with strong optimism.
The deal is considered the largest free trade agreement in history. However, the main debate focuses on agriculture. Some European producers fear competition from Mercosur goods. Producers argue that production standards differ between regions.
Even so, negotiators defend the balance of the agreement. Foreign Minister Rubén Ramírez states, “We have agreed on a balanced agreement that takes into account the main interests of Mercosur countries.” The document includes three chapters: trade, political cooperation, and development cooperation. Notably, the trade chapter attracted the most scrutiny.
The Council of the European Union has approved the signing. Nevertheless, the agreement must still be ratified by the European Parliament. It also requires approval from the congresses of Paraguay, Argentina, Brazil, and Uruguay.
Mercosur-EU trade agreement integration
The Mercosur-EU trade agreement connects two blocs with more than 700 million people. Bilateral trade already exceeds US$ 100 billion annually. Furthermore, the combined market offers strong purchasing power and stable demand. These conditions create opportunities for exporters and service providers.
Peña also stresses Paraguay’s diplomatic responsibility. The country holds the Mercosur pro tempore presidency until June. Hosting the signing strengthens its leadership profile. It also reinforces a message of openness and regional cooperation.
Ultimately, the agreement aims to foster greater trade, investment, and employment opportunities. It aims to enhance competitiveness across various sectors. At the same time, it encourages predictable commercial rules. For Paraguay, the moment represents both opportunity and responsibility.
As Asunción prepares for the ceremony, the city once again becomes a stage for regional history. The decision now moves to legislative bodies. Yet, the direction is clear. Integration and global engagement remain central to Paraguay’s economic vision.
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