The European Union and the Mercosur bloc have formally ratified one of the largest trade agreements in history, concluding a quarter-century of fraught negotiations that repeatedly stalled over environmental and agricultural disputes.

The deal eliminates tariffs on 91 per cent of goods traded between the two blocs, creating a market of over 780 million consumers. European manufacturers gain preferential access to South American markets, while Mercosur nations secure quotas for beef, poultry, and sugar exports.

"This agreement proves that open, rules-based trade remains the best path to shared prosperity," said the European Commission President at a signing ceremony in Montevideo.

Environmental campaigners have condemned the deal, arguing that it will accelerate deforestation in the Amazon by incentivising agricultural expansion. France, which had been the most vocal European opponent, ultimately voted in favour after securing enhanced sustainability clauses.