At a time of rising protectionism and instability, the European Union and the South American trade organization Mercosur will sign a 25-year-old agreement on Saturday to establish one of the biggest free trade zones in the world.
The long-awaited deal coincides with the administration of US President Donald Trump’s widespread use of tariffs and trade threats, which has forced nations to look for new alliances.
Together, the EU and Mercosur account for almost 700 million consumers and 30% of the world’s GDP.
The treaty eliminates tariffs on more than 90 percent of bilateral trade.
The deal will favor European exports of cars, wine and cheese, while making it easier for South American beef, poultry, sugar, rice, honey and soybeans to enter Europe.
The treaty between the EU and Mercosur nations Argentina, Brazil, Paraguay and Uruguay was agreed in Brussels last week despite fierce opposition from European farmers.
They fear the deal will lead to an influx of cheaper South American products due to production standards they consider less stringent.
Some in South America are also wary about the impact of the treaty.
In Argentina, it is estimated that there could be a loss of 200,000 jobs just from the dismantling of the local automotive industry, trade and investment researcher Luciana Ghiotto told AFP.
