What's in the deal?

Officially the Southern Common Market, the trade bloc's full members are Argentina, Brazil, Paraguay and Uruguay. Venezuela is a full member but has been suspended since 2016.

For Mercosur, the EU is the first major partner with which it has struck a trade pact, potentially giving EU firms a head start. The European Union is already Mercosur's biggest trade and investment partner and its second largest for goods trade.

In terms of tariff reduction, it could be the EU's most lucrative trade deal to date, with some 4 billion euros of duties saved on its exports, four times more than its deal with Japan.

Europe will win sharp tariff reductions on goods such as cars and wine and the bloc has its eye on increasing access for its companies making industrial products.

Meanwhile, Mercosur aims to increase exports of farm products. It will get a new 99,000-tonne quota of beef at a 7.5% tariff, phased in over five years, along with tariff-free 180,000-tonne quotas each for sugar and of poultry.

Brazil's President Jair Bolsonaro said on Twitter that the deal was historic and one of the most important trade agreements of all time.

Author: Euronews.com