The signing ceremony, held in Asuncion, Paraguay, featured European Commission President Ursula von der Leyen and Paraguay's President Santiago Pena. The agreement represents the European Union's largest trade accord to date, achieved amidst growing concerns about global cooperation and ongoing tariff disputes.

The Mercosur bloc comprises Argentina, Brazil, Paraguay, and Uruguay. This agreement aims to foster economic growth and strengthen political ties between the two regions, encompassing a combined population of over 700 million people and representing a significant portion of global GDP. Negotiations, which began in 1999, faced numerous obstacles, including disagreements over agricultural subsidies, environmental regulations, and intellectual property rights.

The deal comes at a time when global trade relations are increasingly strained, with protectionist sentiments rising in various parts of the world. Supporters of the agreement argue that it will promote economic development, create jobs, and lower prices for consumers in both regions. Critics, however, express concerns about the potential impact on domestic industries, particularly agriculture in Europe, and the environmental consequences of increased trade. Thousands of Irish farmers previously protested the deal, voicing fears about its impact on their livelihoods.

The agreement must now gain the consent of the European Parliament and be ratified by the legislatures of Mercosur member states. The ratification process is expected to take several years, and its outcome remains uncertain given the political complexities and diverse interests involved.