The European Union is Brazil’s 2nd largest trading partner, only behind China; in 2023, it represented 16% of the country’s foreign trade
The federal government estimates that the free trade agreement announced on Friday (6.Dec.2024) between Mercosur and the EU (European Union) should increase the flow of trade between Brazil and the European bloc by R$94.2 billion, which represents an impact of 5.1% on current trade. It also estimates an impact of R$37 billion on GDP (Gross Domestic Product), that is, around 0.34% of the Brazilian economy. 
As the reduction in import tariffs is gradual, . The government estimates that there will be an increase of R$42.1 billion in imports from the EU and an increase of R$52.1 billion in Brazilian exports to the bloc.
The European Union is Brazil’s 2nd largest trading partner, only behind China. In 2023, trade between Brazil and the European bloc represented 16% of Brazilian foreign trade.
The Brazilian government also estimates an increase of R$13 billion in investments in Brazil, which represents a growth of 0.76%. A 0.56% reduction in consumer prices and a 0.42% increase in real wages are also expected.
Quotas
The reduction in tariffs that Mercosur charges the EU can be immediate or over periods, which vary from 4 years to 15 years. For the automotive sector, tariff reduction periods are longer, ranging from 18 years to 30 years for electrified vehicles, powered by hydrogen and with new technologies.
On the EU side, the tariff reduction can also be immediate or for periods ranging from 4 years to 12 years, depending on the product.
Quotas are also foreseen for agricultural and agro-industrial products from Brazil. In other words, above a certain quantity, some products start paying the full price to enter the block.
This category includes products such as pork, ethanol, sugar, rice, honey, corn and sorghum, cheese, among others.
Brazil exported US$46.3 billion to the European Union in 2023:
- Animal food – 11.6%;
- Metallic ores and scrap – 9.8%;
- Coffee, tea, cocoa, spices – 7.8%;
- Oil seeds and fruits – 6.4%;
- Iron and steel – 4.6%;
- Vegetables and fruits – 4.5%;
- Cellulose and paper waste – 3.4%;
- Meat and meat preparations – 2.5%;
- Tobacco and its manufactures – 2.2%.
Brazil imported US$45.4 billion from the European Union in 2023:
- Pharmaceutical and medicinal products – 14.7%;
- General machinery and industrial equipment – 9.9%;
- Road vehicles – 8.2%;
- Oil, petroleum products – 6.8%;
- Machines and equipment. of energy generation – 6.1%;
- Organic chemicals – 5.5%;
- Specialized machines and devices for certain industries – 5.3%;
- Electrical machines and appliances – 4.7%;
- Materials and chemical products – 3.6%;
- Iron and steel – 3.4%.
With information from .
