RIO DE JANEIRO – Brazilian President Luiz Inácio Lula da Silva and Ursula von der Leyen, President of the European Commission, expressed their optimism on Friday regarding the anticipated signing of a significant free trade agreement between the European Union and four South American nations. The official ceremony for this historic agreement is scheduled for the following day, though President Lula will not be in attendance.

This trade agreement marks a milestone for Mercosur, which comprises Brazil and Argentina—the region’s largest economies—alongside Paraguay and Uruguay. These two economic blocs are set to officially ratify the agreement on Saturday during a ceremony in Paraguay, a culmination of negotiations spanning over 25 years. Although Bolivia recently joined Mercosur, it was not part of the initial negotiations but has the option to join the agreement in the future.

Reports from local media indicate that Argentina’s Javier Milei and Uruguay’s Yamandú Orsi will participate in the ceremony hosted by Paraguay’s President Santiago Peña. However, President Lula has opted not to travel to Asuncion for the event.

Representing Brazil instead will be Foreign Minister Mauro Vieira, stepping in for President Lula at the event.

This decision has raised some eyebrows, considering Lula’s vigorous advocacy for the trade deal, especially since his return to Brazil’s presidency in 2023 for a third, nonconsecutive term. Analysts suggest that Lula’s absence may reflect his dissatisfaction with the timing of the signing, which he had hoped would occur in December during Brazil’s tenure as the rotating president of Mercosur.

In Rio, Lula again pointed to how long the negotiations had taken.

“It was more than 25 years of suffering and attempts to get a deal,” Lula said during a short statement to the press at Itamaraty Palace in downtown Rio alongside von der Leyen.

But he hailed the historic nature of the pact.

“Tomorrow in Asuncion, we will make history by creating one of the world’s largest free trade areas, bringing together some 720 million people and a GDP of over $22 trillion,” he said.

The European Commission’s president paid warm tribute to Lula for his efforts in making the deal happen.

“The political leadership, the personal commitment and passion that you have shown in the last weeks and months, dear Lula, are truly second to none,” said von der Leyen.

In a statement ahead of von der Leyen and European Council President António Costa’s trip to South America, the European Council also said that the latest Brazilian presidency of Mercosur was crucial to advance negotiations, paving the way to its signature in Paraguay.

The significance of creating one of the world’s largest free-trade zones while U.S. President Donald Trump yanks the United States out of the international economy is not lost on the signatories.

“This is the power of partnership and openness. This is the power of friendship and understanding between peoples and regions across oceans,” von der Leyen said. “And this is how we create real prosperity — prosperity that is shared. Because, we agree, that international trade is not a zero-sum game.”

The victory for the EU and Mercosur comes at the expense of the U.S. and China, experts say, as Trump aggressively asserts American authority in the resource-rich region and Beijing uses its massive trade and loans to build influence.

The accord grants South American nations, renowned for their fertile land and skilled farmers, increased access at a preferential tax rate to Europe’s vast market for agricultural goods.

Apex, a Brazilian government investment agency, estimates that EU-bound agricultural exports like instant coffee, poultry and orange juice will rake in $7 billion in coming years.

But Lula on Friday warned that Mercosur would not limit itself to the “eternal role” of commodity exporters. “We want to produce and sell industrial goods with higher added value,” he said.

Flavia Loss, an international relations professor at Foundation School of Sociology and Politics in Sao Paulo, said that Lula’s absence on Saturday may be retaliation for the delay — another sign that Brazil and Mercosur are seeking equal terms with the EU.

“I see Lula’s absence as signaling: ‘The deal is important but we’re not going to change everything for them,’” Loss said.

While the deal is asymmetrical and undoubtedly economically favorable to the European Union, politically the agreement is beneficial for both parties, said Roberto Goulart Menezes, an international relations professor at the University of Brasilia.

For the European Union, which is under pressure amid Trump’s threats to seize control of Greenland, the deal shows that the group of countries is betting on the diversification of its partners and multilateralism, Goulart said, in a symbolic rebuke of Trump’s MAGA logic.

“And for Mercosur, it illustrates that the bloc is relevant, despite accusations of being insignificant and on its last legs.”