UPDATE 5-Mercosur, EFTA agree on trade deal opening access for 97% of exports

South American bloc Mercosur and European Free Trade Association (EFTA) concluded talks on Wednesday on a free trade agreement that will open access for 97% exports, ministers announced during a Mercosur summit in Buenos Aires. The deal, which still requires parliamentary approval and a legal review from members of both blocs, will create a free trade area with almost 300 million people and a combined GDP of more than $4.3 trillion, according to a joint statement published by the commercial blocs. "Both parties will benefit from improved market access for more than 97% of their exports, which will increase bilateral trade and benefit companies and citizens," the statement said. Talks between the EFTA group of four non-EU nations - Norway, Iceland, Switzerland and Liechtenstein - and Mercosur, which includes Brazil, Argentina, Uruguay, Paraguay and Bolivia, began in 2017.

Talks began in 2017 between the EFTA group of four non-EU nations - Norway, Iceland, Switzerland and Liechtenstein - and Mercosur, which includes Brazil, Argentina, Uruguay, Paraguay and Bolivia that is still in the process of becoming a full member of the bloc. Reuters reported last year, citing sources, that an agreement with EFTA was among the most likely to be signed by Mercosur this year. Foreign ministers of both blocs said during a press conference they were committed to taking the necessary steps to ensure the treaty is signed in the coming months. Brazilian Foreign Minister Mauro Vieira said that Brazil was ready to move "as quickly as possible to sign the agreement."

He added that the government hoped to finalize the deal during the second half of 2025 when Brazil takes over the rotating Mercosur presidency, along with the deal between Mercosur and the European Union. The EFTA deal comes as Mercosur and the European Union continue to finalize a long-delayed free trade deal that was agreed, at least in principle, in December last year. That agreement still needs to be translated and then ratified by all 27 EU member states, but has faced pushback from countries such as France. "I believe there may be some resistance or difficulties in certain countries, but the outlook from the European Union is positive," Vieira said.

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