The agreement would establish a free trade Area which would encompass nearly 300 million people and a combined gross domestic product of more than $4,3 trillion.
Negotiations began in 2017 and were relaunched last year after a long period of stagnation. Although current trade between the two blocs is relatively limited — last year Mercosur exported goods and services worth about $3.400 billion and imported approximately $3.800 billion from the EFTA—, the agreement is expected to facilitate market access for more than 97% of traded goods and services by reducing tariffs and simplifying procedures. It also incorporates modern provisions on investment, services, intellectual property, government procurement, sustainability, trade defense, and dispute settlement mechanisms.
Beyond its immediate economic effects, this step represents a significant boost for the international projection of Mercosur, in a context marked by uncertainty surrounding the still pending agreement with the European Union.
Source: CESCE
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