Paraguay recently approved the Mercosur-European Union Agreement. Paraguay becomes the last nation to approve the Mercosur-European Union Agreement. Uruguay, Argentina, and Brazil had already completed this process.
The delay was caused by the time it takes Paraguay’s parliament to approve treaties like this one and requests from some of Paraguay’s productive sectors.
The state continued that it would approve the accord, nonetheless.
Mercosur-European Union Agreement Approved by the Parliament of Paraguay
The agreement had already been approved by Mercosur countries like Uruguay, Argentina, and Brazil. With the Friday, March 13, 2026 announcement from Paraguay, all member countries have finalized the ratification process.
Trade ministers of the South American bloc and representatives of the European Commission concluded negotiations on the free trade agreement back in 2019. These negotiations took over two decades.
Paraguayan Chamber of Deputies President Rodrigo Gamarra stated:
“A market of over 400 million people will open up, with high purchasing power. We are talking about increasing export opportunities for Paraguay.”
Gamarra went on to say:
“The strengthening of integration will allow more investment to flow into Paraguay and the rest of Mercosur.”
Rodrigo Gamarra shared that people shouldn’t simply approve of the deal; they should celebrate it because it will bring Paraguay more market share, better pricing, and higher volumes of commerce. Gamarra says that once the agreement is fully ratified, the country will see:
- More investment in Paraguay
- Job creation
- Better circulation of the Guarani within the country
- Greater international competitiveness for Paraguayan goods.
- Benefits of Mercosur-European Union Trade Deal, According to Parliament
Lawmakers who participated in the legislative session detailed several ways they believe the deal will benefit Paraguay. According to them, the agreement will:
- Allow Paraguayan products to be sold overseas more easily.
- Give Paraguay a new market to sell its products.
- Improve the price competitiveness of Paraguayan goods.
Paraguay’s lawmakers also said that the deal will support micro, small, and medium-sized enterprises. Increase foreign direct investment in Paraguay. Additionally, it will:
- Reduce bureaucratic obstacles to trade between Paraguay and Europe.
- Help integrate Paraguayan producers into global value chains.
- Boost exports and production in key sectors of Paraguay’s economy
For Paraguay specifically, Gamarra noted that:
“This is a strategic tool that will allow us to increase our exports, boost our productive sector and attract foreign investment to the country.”
Why Is It Important for Paraguay?
Brazil, Argentina, Uruguay, and Paraguay benefit from the Mercosur trade deal with the European Union. However, Paraguay in particular will receive special perks from the agreement.
According to analysts, the markets that Paraguay exports to the most are Switzerland, Russia, and the United States.
Paraguay will have exclusive quotas with no tariffs for the following products:
- Biofuels
- Sugar that has been certified organic
Mercosur–European Union relations
EU–Mercosur relations date back to when diplomatic ties were first established between the then-European Economic Community and Argentina, Brazil, Uruguay, and Paraguay in 1980. Both sides agreed to establish a Framework Cooperation Agreement in June 1992, and it entered into force in March 1996.
Trade liberalisation talks between Mercosur and the EU began in May 1999. Political dialogue is regular at Political Dialogue Meetings (PDMS) and Summits between Mercosur and EU leaders. The EU and Mercosur leaders met for their first Summit ever in June 2022.
What Does This Mean for the Future?
The Mercosur-EU agreement will take decades to negotiate. It includes zero duties on almost 99% of goods traded between the two regions. When it goes into effect, it will provide one of the world’s biggest markets.
This free trade agreement between two economic powerhouses will cover more than 780 million citizens. This means more opportunities for the citizens of both regions.
The agreement covers a wide range of topics including:
- Trade
- Investments
- Fight against illegal migration
- Sustainable development.
How Will This Impact Foreign Trade and Investment?
Companies will have greater opportunities to sell abroad in both regions due to the agreement. Production will expand as a result of this, and more people will be hired.
Companies from Europe will also want to open up shop in Paraguay because of its access to the rest of Mercosur and South America. Simply put, more investment will come into the country.
This allows the transfer of technology from European companies to Paraguayan companies. If they choose to do business with them. The result of this will be:
- Increased sustainable development
- The elimination of illegal practices
- Improved infrastructure and institutions
Increased Trade and Investment within Paraguay
More investment in Paraguay means more jobs for Paraguayans. When trade within a country increases, so does production.
When there is more production, companies need to hire more employees. Increased trade within a country also attracts foreign investment. Creating a cycle of growth and opportunity.