Brazil's Lower House Endorses Mercosur-EFTA Free Trade Agreement

The Chamber of Deputies in Brazil has ratified the free trade agreement between the Mercosur bloc and the European Free Trade Association (EFTA). This significant accord, which unites Iceland, Liechtenstein, Norway, and Switzerland, creates a market encompassing 300 million people.

The agreement, initially signed by member governments last September in Rio de Janeiro, integrates eight countries with a combined GDP of $4.3 trillion. Its progression now hinges on approval from the Senate before the Brazilian Congress can officially enact it. The treaty's entry into force also requires ratification by the legislatures of all participating countries.

This development is crucial for Mercosur, comprising Argentina, Brazil, Paraguay, and Uruguay, as it solidifies free trade relations with nearly all of Europe. It complements the provisional free trade agreement with the 27-member European Union, which took effect on May 1 and awaits European Parliament approval.

The EFTA treaty encompasses a broad range of areas, including trade in goods and services, investments, intellectual property, public procurement, competition, rules of origin, trade defense, sanitary and phytosanitary measures, technical barriers to trade, and legal matters, alongside a chapter on trade and sustainable development. It is projected to benefit over 97% of exports from both blocs. EFTA will eliminate tariffs on industrial and fishery products from Mercosur, while offering preferential tariffs for key Mercosur agricultural exports. Mercosur, in turn, will have up to 15 years to phase in tariff reductions on industrial imports from its new European partners.