Mercosur and Europe’s Wealthiest Non-EU Countries Sign Major Trade Deal

Mercosur, a group of South American countries including Brazil, Argentina, Uruguay, Paraguay, and Bolivia, has reached a new trade agreement with EFTA, which is made up of Switzerland, Norway, Iceland, and Liechtenstein.

Official sources confirm that this deal will remove almost all taxes on goods traded between the two groups. Talks for this agreement started in 2017 and took several years to finish. Both sides agreed to cut tariffs on about 97% of the products they trade.

EFTA will drop all taxes on industrial goods coming from Mercosur. In return, Mercosur countries will be able to sell more of their farm products, like cheese, coffee, chocolate, lamb, wine, and spirits, to EFTA countries at lower or no taxes.

The agreement also sets clear rules to make sure only goods really made in these countries get the new benefits. Both sides agreed to follow international safety and quality standards for food and other products, which should make trade smoother and safer.

EFTA is a big player in global investments, with almost 1.5 trillion US dollars invested around the world. This deal gives EFTA companies better chances to invest in South America.

For the first time, Mercosur included special rules to help and protect investments from these European countries. Brazil wanted to keep some freedom in how it spends government money, especially to support its own companies.

The agreement allows this, showing that both sides had to make compromises. Environmental protection was a key issue. EFTA countries wanted strong promises from Mercosur to protect the environment and fight climate change.

The final agreement includes these promises, especially because of concerns about deforestation in Brazil. Before the deal can start, each country’s parliament must approve it.

Once at least one country from each side says yes, the agreement can begin between those countries. This agreement is important because it opens new markets for both sides, helps businesses grow, and encourages more investment.

It also sets new standards for balancing trade and protecting the environment. Together, Mercosur and EFTA represent a combined GDP of almost 4 trillion dollars and a market of more than 290 million people

For the full picture, see our Mercosur EU Trade Deal: Complete Guide.

More: Argentina news in English, every day from The Rio Times.

This article was drafted with automated assistance and reviewed before publication. How we use AI · Report an error