RIO DE JANEIRO, BRAZIL – President Jair Bolsonaro announced on Friday, August 23rd, through a tweet, that negotiations for a free trade agreement between Mercosur (Argentina, Brazil, Paraguay, and Uruguay) and EFTA, a bloc of wealthy European countries formed by Switzerland, Norway, Iceland, and Liechtenstein, which has a combined Gross Domestic Product (GDP) of US$1.1 trillion, have been finalized.
The announcement comes less than two months after Mercosur completed its most significant trade agreement in its history, signed with the European Union in June.
The agreement with the EFTA had been under negotiation in recent years. Other agreements still in negotiation involve Canada and South Korea.
A study by the National Confederation of Industry (CNI) points out that Brazil could benefit from the reduction or abolition of tariffs for 39 different products in trade transactions with EFTA.
In a note, the National Confederation of Industry (CNI) reported that the agreement will be a significant further step to increase the international integration of both industry and the economy in general.
“Brazil has an export potential for 541 product groups to the European bloc, in particular to Switzerland. Over sixty percent of Brazilian exports to this market’s economy are subject to tariffs,” said the organization.
The agreement will require voting by Mercosur and EFTA countries’ parliaments to become effective.
According to CNI, there is great leeway for the expansion of trade in services, particularly in leasing and maritime transport services. In relation to product trade, the main goods favored would be beef, food products, soybean oil, auto parts, paper, and cardboard.