The establishment of the Southern Common Market and the EU Free Trade Area has taken a crucial step forward

On January 17th local time, the Southern Common Market (hereinafter referred to as "Mercosur") and the European Union officially signed a free trade agreement in Asuncion, the capital of Paraguay. This marks a crucial step towards creating one of the world's largest free trade zones after more than 25 years of marathon negotiations. Against the backdrop of deep adjustments in the global economic and trade landscape and the rise of unilateral protectionism, it is widely regarded as an important signal for the EU to promote trade diversification and optimize its external cooperation layout. Analysts believe that considering factors such as strong opposition from some countries within the European Union, the approval process of the agreement may encounter resistance in the parliaments of EU member states and the European Parliament, and there is still uncertainty about whether it will ultimately come into effect.

The Southern Common City and the European Union have a market of over 700 million people, and the combined gross domestic product (GDP) accounts for about 25% of global GDP. According to the agreement, the Southern Common Market will implement zero tariffs on 91% of EU goods in stages, covering key areas such as automobiles and chemicals. The EU estimates that after the agreement comes into effect, its annual exports to the Southern Common Market are expected to increase by 39% and create over 440000 job opportunities for Europe, effectively expanding bilateral trade and creating a stable and predictable development environment for both sides' enterprises. President of the European Commission von der Leyen said: "This agreement has established Europe's position as a reliable economic and trade partner, and will build a strong support for the EU to enhance its strategic autonomy." German Prime Minister Mertz said, "This is an important milestone in Europe's strategic sovereignty and ability to act." In the context of frequent tariff adjustments by the United States and rising global economic uncertainty, actively exploring the Latin American market will help ease the pressure on European exports. Spanish Prime Minister Sanchez stated that the agreement will create favorable conditions for local enterprises to explore the Latin American market.

In a joint statement issued after the signing of the Free Trade Agreement, the member states of the Southern Common Market (Mercosur) stated that the Mercosur EU Free Trade Agreement establishes a comprehensive and balanced framework to promote trade in goods and services, investment, and economic development. The statement stated that the EU will gradually eliminate tariffs on 92% of exports from the Southern Common Market and provide preferential treatment for an additional 7.5% of exports. "The channels for Southern Common Market goods to enter the European market will be significantly expanded, trade conditions will be improved, and the competitiveness of enterprises in the region will also be enhanced. Brazilian President Lula called it a historic day for multilateralism and emphasized that in the international environment of rising protectionism, the agreement fully demonstrates the important role of international trade in promoting common development.

At the same time, there are still many controversies and concerns within the EU regarding the agreement. French President Macron has clearly expressed his opposition, stating that "this agreement is no longer in line with current economic and environmental realities, and all political forces in France hold a unified attitude towards it. Agricultural organizations in Poland, Ireland, and other countries are concerned that the influx of low-cost agricultural products from the Southern Common Market into the European market will impact their own agricultural production order and rural employment stability.

The European Commission stated that it will introduce a package of supporting safeguard measures, including strengthening dynamic monitoring of agricultural product imports and establishing an agricultural crisis response fund, with the core goal of preventing excessive impact of free trade on European agriculture. However, some member states hold a cautious attitude towards this, believing that the actual effects of these measures still need to be continuously tracked and tested in the subsequent implementation process of the agreement. Jo ã o Romero, a professor of public policy at the Federal University of Minas Gerais in Brazil, believes that the ultimate effectiveness of a free trade agreement depends not only on whether all parties can find a balance point among many conflicting interests, but also on whether they can find a common strategic anchor while maintaining the principles of free trade.