The presidents of Mercosur, the South American trade bloc, are due to meet in Argentina on Wednesday.

The summit comes just weeks after the group reached a historic free-trade agreement with the European Union.

CGTN’s Joel Richards reports.

There were backslaps, smiles and handshakes when the European Union and Mercosur announced a free trade agreement last month.

20 years of negotiations culminated in the creation of one of the largest free trade zones in the world, a market of 780 million people, in which up to 90 percent of tariffs will be gradually removed.

This should help producers here, in the Argentine dairy basin of Santa Fe, Argentina. Carlos Sureda, a manager at Don Miguel, says milk production in Argentina has increased only slightly in the past two decades, but he says the Free Trade Agreement could boost not only his sector, but the country’s economy as a whole.

“I think it should be favorable for all sectors, not only agriculture,” Sureda said. “I don’t think it is just a question of some countries producing raw materials and others producing goods with added value, but the opportunity should be there for all the participating countries.”

Argentina’s strong agricultural industry has welcomed the agreement.

“The Argentine agricultural sector is very happy. The institutions were skeptical that this kind of agreement could be reached,” said Ignacio Mantaras from the Argentine Rural Society. “It was considered impossible, that Argentina could reach an agreement with its neighbors first of all, and then with Europe. So this is new era for our country.”

But while Argentine farmers celebrate, in Europe, it is the opposite, with protests over the deal.

There are critics of this free trade agreement both in Europe and in South America.

Trade unions in Argentina have raised their concerns at the idea of European goods swamping the domestic market, yet analysts like Luis Agramunt, the Director of the European Studies program at the Universidad del Litoral, say that on balance, the deal is positive.

“We must consider that there are sectors that could potentially win,” Agramunt said. “There are other sectors that will potentially be affected and have to restructure, but the balance has to be seen positive for Mercosur and each of the countries.”

MERCOSUR leaders meet this week in the first summit since signing the agreement. National parliaments on both sides of the Atlantic must ratify this deal, so free trade between the two is still a number of years away.