The European Union and South American bloc Mercosur agreed Friday on a vast trade deal to end 20 years of talks over one of the world's largest regional commercial accords.

The deal shows that agreements and mutually beneficial compromises can be reached, European Commission President Jean-Claude Juncker said on Saturday.

"This deal is a real message in support of open, fair, sustainable and rule-based trade," Juncker told a news conference on the sidelines of a Group of 20 (G20) summit in Osaka, Japan.

The agreement comes after two decades of often tough EU negotiations with the countries of Mercosur – Argentina, Brazil, Paraguay and Uruguay – that repeatedly stalled because of European farmer sensitivities over the beef market.

The deal comes with the Trump administration caught up in several trade disputes including tensions with China and disagreements with EU countries.

The trade pact is the largest ever concluded by the EU, Juncker said, and would save European companies more than four billion euros' (4.5 billion U.S. dollars) worth of trade duties every year.

It covers markets that total approximately 780 million consumers, an EU statement said.

Once implemented, it is tipped to eliminate 99 percent of agricultural and industrial tariffs on both sides and facilitate exchanges in services and government procurement, reduce technical barriers, and effect sanitary and phytosanitary measures and intellectual property.

Brazil welcomed a "historic" agreement with the EU, while Argentina called the deal "unprecedented."

The deal must be approved by the 28 EU member states, which has raised concerns of European farmers who fear unfair competition, as well as NGOs concerned about consequences for the climate.

(With input from AFP, Reuters)