MERCOSUR signs free trade agreement with four European countries

Waiting for the approval of a free trade agreement with the 27 countries of o advances in other partnerships to expand trade with the old continent. The group signed, on Tuesday (16), a treaty with four European countries outside the EU: Switzerland, Norway, Iceland and Liechtenstein. These four nations form a block called European Free Trade Association (EFTA). The multilateral partnership creates a market of 290 million consumers in economies that add up a gross domestic product (GDP, set of goods and services produced) of US $ 4.39 trillion, equivalent to more than $ 23 trillion by 2024.

The negotiation began in 2017 and, after 14 rounds, had the final terms agreed in June 2025 in Buenos Aires when Argentina occupied Mercosur’s rotary presidency. The signature ceremony of the Mercosur-EFTA agreement was at the Itamaraty Palace in Rio de Janeiro. Currently, Brazil is the group’s President Pro Tempore, which brings together as States Parties to Argentina, Uruguay, Paraguay, Bolivia and Venezuela (currently suspended) and as associated states Chile, Colombia, Ecuador, Guyana, Panama, Peru and Suriname.

Multilateralism

The event, which brought together ministers and diplomats of the members, was marked by the defense of integration between nations around the world, precisely at a time when protectionist policies defined by US President Donald Trump have threatened global trade with the imposition of tariffs on products entering the US. The Vice President of the Republic and Minister of Development, Industry, Commerce and Services, Geraldo Alckmin, classified the agreement as a “great and important” step.

“In a world of uncertainty, we are proving that it is possible to strengthen multilateralism and free trade. Trade brings peoples closer, and development promotes peace,” he said. For him, there are social advances such as job creation, income, opportunities; economic, such as economic complementarity, productive integration, innovation, strengthening of productive chains; and environmental.

Tariff

At the end of the event, when questioned by journalists about the tariff, Alckmin replied that the commitment and guidance of President Luiz Inacio Lula da Silva are “dialogue and negotiation”. He even celebrated the decision of the United States on the 5th of the 5th, to remove the cellulose from the list of feed products.

Free

The Minister of Foreign Affairs,He recalled that negotiations with EFTA were marked by “persistence and spirit of cooperation.” And chose to defend integration between countries. “We give a clear sign that, even in a world marked by commercial tensions and increased protectionism, we continue to advocates of international trade founded on rules as an instrument to raise the economic growth and prosperity of our peoples,” he said. Alongside India, Brazil is the most affected by American taxation, which reaches 50% in most of the products we sell to Americans. For the European Union it is worth the rate of 15%. The more tariffs, the harder it is for countries to sell items to Americans.

Already in free trade, the decrease or extinction of tariffs encourages exchanges among partners, without commercial barriers. Norway’s Minister of Commerce and Industry, Cecile Myrseth, highlighted the agreement in a “world marked by uncertainties.” “The agreement sends a clear message that we believe in the cooperation and power of trade to lead to progress,” he said. The Minister of Iceland’s Culture, Innovation and Higher Education, Logo Már Einarsson, also referred to the scenario of uncertainty and said that “believes in rules -based trade.”

MERCOSUR-EFTA

The four EFTA countries bring together population of 15 million people and GDP of $ 1.4 trillion. In terms of per capita GDP, Liechtenstein is considered the second richest country in the world, in the range of $ 186,000; Switzerland, the room with $ 104,500; Iceland, the sixth with $ 87,200; And Norway, the seventh, with US $ 86.6 thousand. According to the Ministry of Foreign Affairs, once the agreement is implemented, the EFTA will eliminate 100% of import rates from the industrial and fishing sectors, giving Mercosur products more competitive in the new markets.

Regarding agricultural products, for example, commercial opportunities will be opened for beef, poultry and pork, corn, soybean bran, sugarcane molasses, honey, roasted coffee, ethyl alcohol, unsaped smoke, rice, fruits (bananas, melons, grapes), and fruit juices (orange, apple), among others. Because it is a bidirectional partnership, Mercosur will also be more open to EFTA sales. But there are tools for countries to have business defense.

“The Mercosur-EFTA agreement reconciles expansion of market access with the maintenance of the state’s ability to act in sensitive sectors, including the possibility of strategic use of government purchases as a public developmental policy tool,” said Vieira. In addition to trade, the treaty covers areas such as investments, intellectual property rights, public purchases, trade defense, sanitary and phytosanitary measures, among others.

There are environmental approaches, such as the one that only benefits digital service providers if your country’s electrical matrix uses at least 67% clean energy. “This is an innovative commitment in the area of ​​sustainability,” said Mauro Vieira. “Sign this agreement on the eve of COP30 [Conferência das Nações Unidas sobre as Mudanças Climáticas] From Belém, it is an example that it is possible and desirable to integrate the environmental, social and economic dimensions of sustainable development in our commercial practice, ”he added.

Next Steps

The agreement signed is not worth immediately. Before you need to finish the internationalization procedures, involving steps such as translation of the official document and internal processes. In the case of Brazil, for example, it is necessary to be approved by the National Congress. In a joint note, the Ministries of Foreign Affairs; of agriculture and livestock; And development, industry, commerce and services have signaled that Brazil is moving towards other commercial negotiations.

“Brazil is committed to completing the negotiations with the United Arab Emirates, in resuming negotiations with Canada and expanding existing agreements with Mexico and India, among other negotiating fronts,” the statement. The ministries remember that in 2023 a free trade agreement was signed between Mercosur and Singapore.

European Union

Both Vice President Alckmin and Minister Vieira have expressed hope that a free trade agreement with the EU will be signed later this year. “Excellent perspectives,” said Vieira. The free trade agreement between Mercosur and the EU has been expected for about 25 years. The terms of the multilateral partnership were signed in December last year. But to become effective, it must still be approved in the European Parliament. On September 3, the president of the European Commission, Ursula von der Leyen, sent the text to appreciate the parliament. The European Commission is the EU executive arm. According to the Brazilian government, the agreement will create a market of over 700 million people and correspond to 26% of the global economy. To be approved, the terms need a qualified majority among EU governments, ie 15 of the 27 members representing 65% of the population of the European bloc.

Defenders and Opponents

European countries advocates of approval, such as Germany and Spain, believe that the agreement, in addition to opening markets for European products such as cars, machines and chemicals, offers a way to compensate for the loss of trade caused by and to reduce the dependence of China, especially in relation to essential minerals. But France has been opposed to the hit with Mercosur. EU’s largest beef producer has classified the agreement as “unacceptable”, saying that it does not take into account environmental requirements in agricultural and industrial production. President Luiz Inacio Lula da Silva counteracts, stating that France is a protectionist about his agricultural interests. In July, it was agreed that European exports would be taxed at 15% upon entering the United States.

*With information from Agência Brasil