What the EU–Mercosur Deal Means for Paraguay
Sugar, biofuels and services stand to gain. The environment, not so much.
It’s the trade deal that (nearly) nobody in Paraguay wanted.
Ecologists warn it will accelerate deforestation. Human rights monitors say it has already stoked conflict over land. Paraguay’s trigger-happy soybean farmers and chainsaw-happy ranchers are squirming at the prospect of a greater spotlight on the supply chain.
One influential alt-right broadcaster meanwhile brands it “one of the most dangerous agreements ever signed by our country.” The EU–Mercosur Association Agreement, Enrique Vargas Peña argues, is a “colonial” power-grab imposed by the “dictatorship” of Brussels.
Foreign minister Rubén Ramírez Lezcano said only last week that Paraguay was “dissatisfied” with the agreement for its “lack of ambition”, complaining that it gives the South American trade bloc only limited access to European markets.
Just about the only outspoken fan of the deal – inked on Saturday at a ceremony at the Central Bank of Paraguay in Asunción – is Paraguay’s president.
“This is a genuinely historic day,” Santiago Peña told dignitaries including Javier Milei, European Commission president Ursula von der Leyen, Uruguay’s president Yamandú Orsi, and Brazilian foreign minister Mauro Vieira.
The signing of the deal after 25 years of painstaking negotiations, Peña argued, will “substantially benefit” millions on both sides of Atlantic.
“In a complex, unstable, dangerous world,” he added, “where the old certainties fall away before our eyes, Europe and South America should unite to show a different way forward.”
A historic agreement
At least on paper, the Association Agreement is a seriously big deal.
It envisions the world’s largest free trade zone: a shared market of 31 nations and 720 million people worth $22tn and accounting for 25% of global GDP.
The politics behind it are just as important.
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