Mercosur signs free trade deal with Iceland, Liechtenstein, Norway and Switzerland
World — Agreement creates nearly 300 million-person trade zone and must be ratified by each country
South America's Mercosur trading bloc on Tuesday signed a free trade agreement with four non-EU European countries — Iceland, Liechtenstein, Norway and Switzerland — in a ceremony in Rio de Janeiro, officials said.
The accord, signed by Argentina, Brazil, Paraguay and Uruguay on behalf of Mercosur, is designed to create a free trade zone covering nearly 300 million people and a combined gross domestic product of more than $4.3 trillion, according to a joint statement. The agreement covers goods, services, investment and intellectual property rights and aims to improve market access for more than 97% of exports between the parties.
Brazil's Foreign Minister Mauro Vieira said the pact was a signal against protectionism. "Even in a world marked by trade tensions and rising protectionism, we remain advocates of international trade based on rules," he said at the ceremony. That remark referenced tariffs imposed by U.S. President Donald Trump on a wide range of countries; ABC News reported that Trump had enforced tariffs of 50% on Brazil, citing disputes that included the prosecution of former President Jair Bolsonaro.
The Mercosur signing came days after a panel of justices ruled that Bolsonaro had attempted a coup and sentenced him to 27 years in prison. The ABC News report linked that development to U.S. trade measures but did not provide additional legal or diplomatic analysis tying the verdict directly to the tariffs.
Negotiations on the deal began in June 2017 and spanned 14 rounds before Tuesday's signing. The joint statement said the pact could lead to lower prices for some consumer goods — including Swiss chocolate and Norwegian cod in South America — and cheaper beef for European consumers.
Each signatory country must ratify the agreement for it to take effect. Mercosur also hopes the move will bolster efforts to approve a much larger trade deal with the European Union, which both sides reached in principle last December after about 25 years of talks but have yet to ratify.
International relations scholar Flavia Loss of the Foundation School of Sociology and Politics in Sao Paulo said the new deal signals Mercosur's willingness to adapt to EU standards and could help persuade EU members to finalize the larger pact.
Brazil's Foreign Ministry said the country is also pursuing additional trade negotiations, including plans to conclude talks with the United Arab Emirates, resume negotiations with Canada and expand existing agreements with Mexico and India. Brazilian President Luiz Inácio Lula da Silva posted on X that the agreement "highlights the importance of multilateralism, the strengthening of our bloc, and our partnerships with European countries."
The parties said the pact is expected to increase bilateral trade and deliver benefits for businesses and individuals, but provided no timeline for implementation beyond the requirement that each country complete its national ratification procedures.