Mercosur and the European Free Trade Association (EFTA, comprising Liechtenstein, Norway, Iceland, and Switzerland) announced on July 2, 2025, the ending of negotiations for a new free trade agreement. The deal marks a milestone in strengthening ties between the two blocs, aligning with both regions’ strategies to diversify trade partnerships amid a global context of economic uncertainty and increasing protectionist policies.
Mercosur and EFTA together represent a population of approximately 290 million people and a GDP of around USD 4.39 trillion (2024). The agreement aims to boost trade in goods and services, draw investments, and promote sustainable practices across value chains.
Two blocs, multiple benefits
The agreement removes or reduces tariffs on nearly 99% of the trade value between the blocs, encompassing both agricultural and industrial goods. Tariff preferences granted by EFTA countries will take effect on the first day the agreement enters into force. For Mercosur, market liberalization will be implemented over different timeframes, immediately or in four, eight, 10, or 15 years, reflecting regional economic specificities.
In addition to expanding access to high-income markets such as Norway and Switzerland, the agreement reinforces Mercosur’s position as an important trade partner in Europe, especially following the conclusion of the Mercosur-European Union agreement in December 2024.
Expanded access and recognition of origin
In the agricultural sector, the agreement opens opportunities for beef, poultry, and pork, as well as fresh fruits (grapes, melons, and bananas), fruit juices, roasted coffee, unmanufactured tobacco, sugarcane molasses, corn, rice, and honey, among other products. Quotas with preferential intra-quota tariffs were also negotiated, along with provisions to ensure that Mercosur producers can fully benefit from the granted shares.
The chapter on intellectual property (IP) includes the acknowledgment of 63 Brazilian Geographical Indications (GIs), thus strengthening the worth and identity of traditional products. This includes well-known Brazilian products such as Queijo da Canastra, a regional cheese from Minas Gerais; Cachaça, Brazil’s traditional sugarcane spirit; and Café do Cerrado Mineiro, a specialty coffee from the Cerrado region of Brazil. It also includes provisions for the recognition of EFTA indications in Mercosur, with safeguards for local producers who had been using those terms before the agreement.
Next steps
The agreement is expected to be signed in 2025, following the end of the legal review of approximately 70 texts that comprise the treaty. Once signed, the agreement will be translated into the parties’ official languages and submitted to internal approval and ratification processes. The agreement will enter into force on the first day of the third month following ratification by at least one Mercosur country and one EFTA country, allowing for bilateral implementation.