The Mercosur bloc and EFTA seal a far-reaching trade pact to liberalize 97% of their trade

The member countries of the Mercosur, which include Argentina, Brazil, Paraguay and Uruguay, have achieved a milestone in their internationalization agenda by closing a trade agreement with the select group of nations that make up the AELCIceland, Liechtenstein, Norway, and Switzerland. This treaty, one of the most comprehensive and ambitious signed to date, was announced during the South American bloc's semiannual summit held in the Argentine capital.

The agreement is of considerable magnitude, involving a combined gross domestic product (GDP) exceeding $4,3 trillion. Under the negotiated terms, preferential access is established for more than 97% of export flows in both directions. As Argentine Foreign Minister Gerardo Werthein pointed out, "Both sides will benefit from improved market access for more than 97% of their exports, resulting in increased bilateral trade and benefits for businesses and individuals.".

The scope of the agreement is very broad and is not limited solely to trade in goods. It covers crucial chapters for the modern economy, such as services, investments, intellectual property protection, government procurement, competition policies and rules of originIt also includes regulatory frameworks for trade defense, sanitary and phytosanitary measures, and the elimination of technical barriers to trade, as well as a dispute resolution mechanism and a commitment to sustainable development.

The tariff reduction will be implemented progressively. The EFTA countries have committed to the total and immediate abolition of customs duties for industrial goods from Mercosur, including fishery and marine products. For its part, the South American bloc will have a period of up to 15 years in the Making to gradually eliminate tariffs on most industrial imports from its new European partners.

Enthusiasm for the agreement was palpable among European leaders. Guy Parmelin, vice president of the Swiss Confederation, described it as “an important agreement for everyone”Parmelin highlighted the benefits for the South American bloc, stressing that "Mercosur countries receive preferential access to high-income EFTA markets, with more than 14 million consumers. Tariff-free access for all industrial products, plus trade preferences, quotas, and even full liberalization for key exports such as red wine, meat, and coffee.".

The road to this point has been long, with a negotiation process that began in 2015 and required fourteen formal rounds. The lead negotiator for Switzerland, Helene Budliger, confirmed the urgency of finalizing the agreement: "This agreement is a top priority for EFTA countries, and we have intensified negotiations. We want to expedite the agreement as much as possible. It depends on bureaucratic issues such as translations, but it will be a priority.".

Now, the next step is the official signature and subsequent ratification by the parliaments of each of the nations involved. From Brazil, Foreign Minister Mauro Vieira has expressed his government's firm commitment to expedite this process, stating that "Brazil hopes to ratify the pact during its pro tempore presidency of Mercosur."The agreement is expected to enter into force definitively in the coming months of 2025.