"The new trade framework -- part of a wider Association Agreement between the two regions -- will consolidate a strategic political and economic partnership and create significant opportunities for sustainable growth on both sides," a European Union news release said.
According to the EU statement, the deal aims to remove the majority of tariffs on EU exports to Mercosur, an economic and political bloc comprising Argentina, Brazil, Paraguay and Uruguay, plus several associate members. Venezuela's membership in the group was suspended in 2017, in a Mercosur resolution that cited a "rupture of democratic order" in the country.
The deal impacts a combined population of more than 780 million people, and would save more than $4.5 billion worth of duties per year, according to European Commission President Jean-Claude Juncker, who declared it the largest trade agreement the European Union has ever concluded.
"In the midst of international trade tensions, we are sending today a strong signal with our Mercosur partners that we stand for rules-based trade," he said.
In addition to lifting tariffs, the agreement would also establish legal protections for special products made in protected European areas, like prosciutto from Parma, Italy, Tokaji wines from Hungary and Comté cheese from France.
Brazilian President Jair Bolsonaro appeared to celebrate on Twitter with a GIF of himself giving the thumbs-up sign, while on Facebook, Argentinian President Mauricio Macri—who faces elections in October—hailed the "historic" agreement as one that would help ensure Argentina's future.
However, not everyone welcomed the deal. In a statement, the Irish Farmers Association called on Ireland not to ratify the deal, and argued that its terms will be a disadvantage European beef farmers.
The agreement on trade is part of a much larger "Association Agreement" that is hoped to enhance political dialogue and increase cooperation areas beyond trade, including migration and environmental protection, at a time of increasing isolationism and trade protectionism.
Negotiations to establish a trade agreement between Europe and the South American group first began in the 1990s, and ebbed and flowed through the years before regaining momentum in 2016. Both parties must still finalize the greater agreement text before it is sent for approval to member states.