Text was approved by the plenary of the Chamber of Deputies on Wednesday (25) and defines commercial rules for different sectors of the economy
On Wednesday (25), the Chamber of Deputies between Mercosur and the European Union (EU), a treaty that creates rules for trade between the two blocks and that now will be sent to the Senate.
The document establishes tariff, regulatory standards and transition deadlines for bilateral trade in goods and services between the countries of the two blocs.
Among the main points is the definition of the export of rare minerals. The agreement maintains Brazil’s right to apply tax on, for example, niobium, lithium and cobalt, sold to the EU. The rule establishes that the rate charged to the European bloc must be, at least, the half of the tax charged on exports to other countries. The maximum limit for this tax for Europe will be 25%. The production process will also incorporate European sustainability standards and supply chain tracking.
Automotive sector
The text foresees a period of gradual transition for the end of tariffs on vehicle trade between the blocs:
- Combustion vehicles: tariffs eliminated over 15 years;
- Electrified vehicles: in 18 years;
- Hydrogen vehicles: in 25 years (with a 6-year grace period);
- Vehicles powered by new technologies: in 30 years (with a 6-year grace period).
On the regulatory side, Brazil committed to accept test reports issued in the EU for items such as seat belts, windows, brakes and emissions, adopting the 1958 United Nations (UN) standards as a reference.
There is also a specific protection mechanism for the national automotive industry. If there is an increase in imports of European cars that causes damage to the local industry, Brazil may suspend the tariff reduction schedule or return to charging the 35% rate for a period of three years, with the possibility of renewal for another two years. This measure no compensation to the European Union and depends on the presentation of data on the level of employment, production volume and installed capacity of the sector in Brazil.
Regional products
The agreement provides for the mutual recognition of geographical indications (IGs) – whose registration is granted to products or services that are characteristic of their place of origin -. This means, for example, that certain Brazilian GIs will be protected in the European Union. Among the 37 Brazilian GIs that will be recognized by the EU are: cachaça, cheeses from Canastra, honey from the Pantanal, coffee from Cerrado Mineiro, cocoa from Linhares and wines from Farroupilha.
To protect Brazilian producers, the text includes a safeguard rule: local companies that already used the names of European products — such as “parmesan” or “gorgonzola” cheeses — may continue to use these terms on their labels.
Medicines
The rules on medicine patents follow international agreements already in force, such as TRIPS – Agreement on Trade-Related Aspects of Intellectual Property Rights -. The agreement preserves Brazilian industrial property law, maintaining permission for generic medicine policies and the use of compulsory licensing (patent breach) for public health access policies.
Next stages
With approval in the Chamber of Deputies, the agreement now will be analyzed by the Senate. After approval in Brazil, it is still ratification required in the parliaments of other countries Mercosur and the European Union for the agreement to come into force.
