The European Union and Mercosur sign a free trade agreement

The European Union and the Latin American trade bloc Mercosur signed a controversial and long-awaited free trade agreement in Asunción on Saturday.

The agreement creates one of the largest free trade areas in the world, affecting more than 700 million people and covering an estimated US$22 trillion in output.

The agreement between the 27 EU member states and the Mercosur countries Brazil, Argentina, Uruguay and Paraguay is designed to strengthen trade between these economic blocs.

The new free trade area is also seen as a signal to counterbalance US President Donald Trump's protectionist trade policies. The aim is to eliminate trade and tariff barriers between the EU and the „Mercosur“ countries as far as possible.

The negotiations, which began in 1999, have repeatedly stalled, partly due to fears among European farmers that they would have to comply with different standards.

The agreement still needs to be approved by the European Parliament to enter into force.