After 26 years of negotiations, the European Union and Mercosur signed the partnership. The text creates the foundations for the largest free trade area in the world, around 700 million people.
1. What is it
In general terms, the agreement will gradually eliminate import tariffs on around 91% of goods traded between the two blocs, with gradual liberalization and longer deadlines for sensitive sectors.
Currently, Brazilian products have high tariffs on the European market. On the other hand, industrial goods coming from Europe suffer from up to a 35% tax rate. The agreement seeks to reduce these distortions and eliminate barriers such as technical requirements and bureaucratic procedures.
2. How it impacts Brazil
For Brazil, the news will have a major impact on exports, as Europe will be one of the main destinations for Brazilian goods on the global market.
The agreement provides for the reduction or elimination of tariffs on meat, sugar, ethanol, coffee, orange juice and forestry products. Reducing export tariffs means increasing the country’s competitiveness in a large market like Europe, in addition to expanding business possibilities.
The text of the negotiation is not limited to trade in goods and benefits the market as a whole: financial services, telecommunications, transport, services and manufacturing. Investments will also have bureaucratic reductions, as well as public purchases and competition in European tenders with better conditions.
3.Why only now
The agreement began to be negotiated in 1999 and made significant progress on December 6, 2024, when Mercosur and the European Union announced the conclusion of negotiations and the beginning of the preparation of texts to sign the pact.
After 26 years, the international context was relevant to the negotiation as the tariffs applied by the United States to exports reinforced the importance of discussing the topic.
4. When does it come into effect
The text, which will be signed on January 17th, still depends on the approval of the European Parliament. The effects, in addition to being gradual, will be slow and will have greater effects in the long term.
