Mercosur, European bloc announce free trade agreement
The Mercosur economic bloc has concluded negotiations on a trade agreement with the European Free Trade Association (EFTA), which comprises Switzerland, Norway, Iceland, and Liechtenstein. The announcement, marking the end of talks that began in 2017, was made on Wednesday (Jul. 2) during the 66th Mercosur Summit in Buenos Aires.
Mercosur is made up of Argentina, Brazil, Paraguay, and Uruguay, along with Bolivia, which is in the process of joining.
“Following Singapore in 2023 and the European Union in 2024, Mercosur has now completed its negotiations with EFTA—a bloc that includes Switzerland, Norway, Liechtenstein, and Iceland. This is a high-income market that will ensure full access for 100 percent of our industrial exports. It took eight years of hard work, but the result demonstrates that dialogue is the path to stimulating our economy, generating jobs and income,” said Brazil’s Vice President and Minister of Development, Industry, and Trade Geraldo Alckmin.
Founded in 1960, EFTA is an intergovernmental organization representing a population of 15 million inhabitants and a combined gross domestic product (GDP) of $1.4 trillion. In terms of GDP per capita, Liechtenstein ranks as the second richest country in the world, with an average annual income of $186,000. Switzerland follows as the fourth richest, with a per capita income of $104,500. Iceland and Norway also rank among the countries with the highest average incomes globally.
“The EFTA services market is one of the largest in the world. In 2024, the bloc imported $284 billion in services. If considered as a single country, it would rank as the ninth largest importer globally—ahead of India, Japan, Italy, South Korea, and Canada. EFTA also exported $245 billion in services in 2024, making it the ninth largest exporter, ahead of countries such as Japan, Spain, Canada, and Italy,” the Brazilian government said in a statement.
Despite the conclusion of negotiations, the agreement must still be ratified internally by each of the countries involved.
President Luiz Inácio Lula da Silva is in Buenos Aires, where he will participate in a meeting with other Mercosur leaders on Thursday morning (3). The Brazilian government will assume the pro tempore presidency of the bloc for the next six months.
