Agreement Reached With EFTA Countries to Expand Market for Brazilian Products

RIO DE JANEIRO, BRAZIL – The agreement between Mercosur and the bloc of European countries of the European Free Trade Association (EFTA) is to expand markets for Brazilian products and increase national economic competitiveness.

The Brazilian government expressed its expectation yesterday, August 24th, in a joint memo from the Ministries of Foreign Affairs, Economy and Agriculture, Livestock and Supply.

On Friday, August 23rd, following ten rounds of the negotiations initiated in 2017, the two blocs reached a trade agreement, which will require a vote by the member countries’ parliaments to become effective.

In the joint memo, the three ministries state that the Brazilian market will have easy access to the bloc comprising Switzerland, Norway, Iceland, and Liechtenstein, with a Gross Domestic Product (GDP) of US$1.1 trillion and a population of 14.3 million people.

“The agreement will expand markets for Brazilian products and services, promote increased competitiveness of the national economy by reducing production costs and ensuring access to high technological inputs at lower prices. Consumers will benefit from access to a greater variety of products at competitive prices.”

Once the agreement becomes effective, it will allow preferential access for agricultural products exported by Brazil, through tariff or quota exemption, and the opening of trade opportunities for several products, such as beef, chicken meat, corn, soy bran, sugarcane molasses, honey, roasted coffee, fruits and fruit juices, according to the ministries.

“According to estimates by the Ministry of Economy, the Mercosur-EFTA agreement will represent an increase in Brazil’s GDP of US$5.2 billion over fifteen years. An increase of US$5.9 billion and US$6.7 billion in total Brazilian exports and imports is expected, respectively, totaling an increase of US$12.6 billion in the Brazilian trade network.”

“A substantial increase in investments in Brazil is expected, of approximately US$5.2 billion, over the same period”, reads the note.

The agreement was announced yesterday by President Jair Bolsonaro and took place less than two months after Mercosur completed the most substantial trade agreement in its history with the European Union in June.