Mercosur-EU Trade Deal Opens New Doors for Brazilian Industry
The Mercosur-EU trade agreement offers Brazilian industry substantial new export opportunities and tariff benefits, promising growth but also presenting regulatory challenges.
- • Mercosur-EU deal will free tariffs on 82.7% of Brazilian exports to the EU immediately.
- • Brazil's product coverage in global imports linked to the agreement rises to 36%.
- • Brazil expects 25-30% growth in electronics exports to the EU in the medium term.
- • Challenges include adapting to EU regulations and high raw material costs.
Key details
Brazil's recent Mercosur-EU trade agreement, signed after 26 years of negotiations, signals a transformative moment for the nation's industry, promising expanded market access and growth opportunities across multiple sectors. The National Confederation of Industry (CNI) estimates that with this deal, Brazilian products will comprise 36% of global imports linked to the agreement, a significant rise from the current 8% coverage through existing trade agreements. Approximately 82.7% of Brazilian exports to the EU will enter tariff-free immediately, with over 5,000 items becoming duty-free in the European market, enhancing competitiveness for Brazilian manufacturers.
President of CNI Ricardo Alban lauded the agreement as the most significant commercial decision for Brazil's industry in decades, highlighting its role in ensuring immediate European market access and providing Brazil additional years—averaging eight more—to adapt to tariff reductions compared to the EU. The deal also creates prospects for sustainability projects and increased European investment in Brazil.
Brazil's government has identified strong export potential in sectors such as aviation, steel, chemicals, furniture, and electronics. In 2024, Brazilian exports to the EU included $662.6 million in aerial vehicles and $1.2 billion in machinery, while the Brazilian Electrical and Electronics Industry Association (Abinee) projects a 25-30% increase in electronics exports to Europe in the medium term. This surge is expected to diversify suppliers and improve competitiveness through access to advanced technology.
Nevertheless, challenges like higher raw material costs and compliance with European environmental and regulatory standards remain. The Ministry of Development, Industry, Trade and Services (Mdic), led by Secretary Tatiana Prazeres, stresses the importance of private sector collaboration to fully capitalize on these opportunities.
President Luiz Inácio Lula da Silva emphasized a strategic shift, aiming for Brazil to transcend commodity exports in favor of higher value-added products, leveraging the agreement's legal stability and business confidence to expand exports beyond Europe.
As the accord awaits ratification by the European Parliament and Mercosur legislatures, Brazilian industry stands at the threshold of a more diversified global presence and enhanced economic growth through this landmark trade partnership.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.
