Mercosur signs FTA with EFTA countries

After negotiations that lasted nearly a decade, the signatory member states of Mercosur and the members of EFTA (European Free Trade Association) signed an agreement creating a free trade zone for nearly 300 million consumers and a combined GDP of approximately $4.3 trillion.

The Free Trade Agreement between Argentina, Brazil, Paraguay, and Uruguay, on the one hand, and the bloc comprising Iceland, the Principality of Liechtenstein, the Kingdom of Norway, and the Swiss Confederation, was signed today in Rio de Janeiro, Brazil.

The initiative, which began to be discussed in 2017 through 14 rounds of negotiations, will positively affect 97% of both blocs' exports, "which will translate into an increase in bilateral trade and benefits for companies and individuals," the Argentine Foreign Ministry stated.

Representing Argentina, Gerardo Werthein, Minister of Foreign Affairs, International Trade and Worship, signed the document.

Mauro Vieira, Minister of Foreign Affairs of Brazil, his Uruguayan counterpart Mario Lubetkin, and Patricia Frutos, Vice Minister of Economic Relations and Integration of Paraguay, did the same.

For EFTA, which brings together European countries that are not part of the European Union (EU), the signatories were the Vice President of Switzerland, Guy Parmelin; the Minister of Culture, Innovation and Higher Education of Iceland, Logi Már Einarsson; the Minister of Trade and Industry of Norway, Cecilie Myrseth; and Ambassador Frank Buechel representing Liechtenstein.

"The Free Trade Agreement will create new business opportunities for economic operators in the Mercosur and EFTA countries, including the large number of small and medium-sized enterprises existing in each jurisdiction," the official statement stated. It also indicated that "it will provide greater market access and modernized regulations for customs clearance. Economic operators in the Mercosur and EFTA countries will benefit from greater predictability and legal certainty in trade."

The agreement will cover trade in goods and services, investment, intellectual property, government procurement, competition, rules of origin, trade defense, sanitary and phytosanitary measures, technical barriers to trade, legal matters, and dispute settlement, and will include a chapter on trade and sustainable development.

Despite the significant progress, its entry into force will not be immediate as it will depend on parliamentary approval in each country, a process that could take until 2026, according to diplomatic sources.

The short-term expectation is to surpass the levels of trade that, in 2024, represented exports from Mercosur to EFTA worth $3.373 billion and imports of products worth $3.824 billion, with Switzerland as the main trading partner.