The European Union and South America’s Mercosur bloc have signed a major trade agreement in Asunción, Paraguay, on Saturday. The deal, reported by Turkey-based Hurriyet Daily News, brings together the EU’s 27 member states and Mercosur members Brazil, Argentina, Uruguay, and Paraguay, forming one of the world’s largest free trade zones. The signing follows nearly 25 years of complex negotiations.

The agreement is viewed as a significant message against the tariff threats and trade uncertainty associated with U.S. President Donald Trump’s administration. Trump recently threatened to impose tariffs of up to 25 percent on several European countries over the Greenland issue. During the signing ceremony, EU chief Ursula von der Leyen said the parties chose fair trade over tariffs and long-term partnership over isolation. Paraguayan President Santiago Peña described the deal as a clear message in favor of international trade amid global tensions, while European Council head Antonio Costa said it rejects the use of trade as a geopolitical weapon.

Leaders expressed hope that the agreement will generate employment, prosperity, and new opportunities across both regions.