In a significant development for global commerce, the European Free Trade Association (EFTA)—comprising Switzerland, Norway, Iceland, and Liechtenstein—has finalized a comprehensive free-trade agreement with South America’s Mercosur bloc, which includes Argentina, Brazil, Paraguay, Uruguay, and Bolivia. The deal, announced during the Mercosur summit in Buenos Aires, marks the culmination of nearly a decade of negotiations and is set to create a vast free-trade area covering almost 300 million people and a combined GDP exceeding $4.3 trillion.
The agreement is designed to remove or reduce tariffs on more than 95% of goods currently exported to Mercosur by EFTA companies over a 15-year period. In return, Mercosur countries will gain preferential access to EFTA’s high-income markets, including duty-free access for all industrial products and significant tariff preferences or full liberalization for key exports such as beef, coffee, and red wine. The deal also covers services, investment, intellectual property, government procurement, competition, and sustainable development, reflecting the broad ambitions of both blocs.
Negotiators paid particular attention to sensitive issues such as environmental standards and government procurement. EFTA pushed for robust climate and sustainability commitments, while Mercosur sought flexibility to support domestic industries. The agreement also introduces modern rules on public procurement and competition, aiming to strengthen legal certainty for investors and foster deeper economic ties between the regions.
While the agreement has been hailed as a “major milestone” and “one of the world’s largest free trade tools,” it still requires ratification by the parliaments of all participating countries before entering into force. Both sides anticipate that the deal will boost bilateral trade, simplify import and export procedures, and deliver tangible benefits to businesses and consumers across Europe and South America.
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(Source: Merco Press | Deutsche Welle | Buenos Aires Herald)
