Paraguay’s Final Approval Paves Way for Landmark Mercosur-EU Trade Bloc; Singapore Pact Comes Online

The South American trade bloc Mercosur has achieved two significant milestones in expanding its global trade relationships, finalizing a long-awaited pact with the European Union while simultaneously activating its first agreement with a Southeast Asian nation.

Paraguay’s lower house of congress unanimously approved the free trade agreement between Mercosur and the European Union, the Associated Press reported. This vote makes Paraguay the last of the four founding members of the South American bloc to ratify the deal, a critical step for an agreement that has been under negotiation for more than two decades. The accord is set to create one of the world’s largest free trade zones, encompassing over 700 million people and accounting for a quarter of the global gross domestic product. The deal now only requires the signature of Paraguayan President Santiago Peña. According to the Associated Press, the European Commission has indicated it will provisionally ratify the agreement, which could allow it to take effect while a legal challenge is reviewed by the European Court of Justice.

This breakthrough with Europe comes as Mercosur deepens its economic ties with Asia. The Mercosur-Singapore Free Trade Agreement (MCSFTA) has officially entered into force, according to a report from Allen & Gledhill. The agreement became effective for Singapore and Paraguay on February 1, 2026, and for Singapore and Uruguay on March 1, 2026. As the first trade agreement between Mercosur and a Southeast Asian country, the MCSFTA is expected to significantly lower tariffs, establish predictable conditions for investment, and promote cooperation in key areas like digitalization and sustainable development. The deal will eventually eliminate import tariffs on approximately 96% of products over a 15-year period, fostering new trade opportunities between the two regions.