Brazilian President Luiz Inácio Lula da Silva hailed what he called a historic EU-Mercosur free trade agreement on Friday, as European leaders prepared for its expected formal signing the next day in Paraguay. Lula’s trip to the signing ceremony in Asuncion was not planned, and Brazilian officials said he would be represented instead by Foreign Minister Mauro Vieira.
The deal involves the European Union and Mercosur’s four member countries: Brazil and Argentina, as well as Paraguay and Uruguay. Bolivia, the newest Mercosur member, was not part of the negotiations but can join the agreement in the coming years, AP reported.
Lula and European Commission President Ursula von der Leyen celebrated the expected signing Friday, at a moment that marked the culmination of talks described as taking more than a quarter-century. The agreement’s signing ceremony is scheduled for Saturday, hosted by Paraguay President Santiago Peña, AP reported, with local media also reporting that Argentina’s Javier Milei and Uruguay’s Yamandú Orsi would be present.
Lula, according to AP, did not travel to Asuncion and instead planned for Vieira to attend on his behalf. AP said the decision came as a surprise given Lula’s recent push for the agreement and his return to Brazil’s presidency in 2023 for a third nonconsecutive term.
In Rio de Janeiro, Lula pointed to the long negotiations during a short press statement at Itamaraty Palace alongside von der Leyen. He said, “It was more than 25 years of suffering and attempts to get a deal,” while also hailing the pact’s broader significance. Later in the statement, he said, “Tomorrow in Asuncion, we will make history by creating one of the world’s largest free trade areas, bringing together some 720 million people and a GDP of over $22 trillion.”
Von der Leyen praised Lula for his role in bringing the negotiations to signature, saying his “political leadership, the personal commitment and passion that you have shown in the last weeks and months, dear Lula, are truly second to none.” Speaking in Copacabana earlier Friday, she tied the deal to what she described as partnership across oceans, saying, “This is the power of partnership and openness” and “This is the power of friendship and understanding between peoples and regions across oceans,” adding that international trade is “not a zero-sum game.”
European Council President António Costa, speaking at a later press conference, said Brazil’s most recent Mercosur presidency was crucial in advancing negotiations and paving the way for the agreement’s signature in Paraguay. In addressing criticisms that the deal favors the EU, Costa said it is “also an investment agreement,” and he described it as not following what he characterized as a simple extractive approach in which added value is generated elsewhere. He said, “There is no longer that post-colonial logic of going around extracting natural resources.”
AP reported that experts viewed the EU-Mercosur deal as a win for the two blocs while coming “at the expense of the U.S. and China,” in part tied to how the United States seeks to assert authority in the resource-rich region and how China uses trade and loans to build influence. For Mercosur, analysts said the agreement demonstrates the bloc’s relevance despite accusations that it has reached the end of its influence.
On the economic impact, AP cited an estimate from Apex, a Brazilian government investment agency, that EU-bound agricultural exports such as instant coffee, poultry and orange juice will bring in $7 billion in coming years. Lula, AP reported, also warned that Mercosur would not confine itself to what he called “the eternal role” of commodity exporters and said, “We want to produce and sell industrial goods with higher added value.”
Flavia Loss, an international relations professor in São Paulo, said Lula’s absence from the signing ceremony could reflect disappointment that the deal was not signed in December, when Brazil held the rotating Mercosur presidency. Loss interpreted the decision as a signal that the agreement’s importance would not necessarily translate into changing everything for the EU.
Roberto Goulart Menezes, a professor at the University of Brasília, said the accord is asymmetrical in economic terms but politically beneficial to both sides. He said the agreement shows the EU betting on diversification and multilateralism and frames it as a symbolic rebuke to Trump’s approach, while also saying that for Mercosur it illustrates the bloc’s continued relevance.