Brazil Seals Strategic Free Trade Agreement with EFTA,Boosting Exports and Economic Growth

Strategic Insights -

Brazilian Vice President and Minister of Development, Industry, Trade and Services Geraldo Alckmin has hailed the country's newly signed free trade agreement with the European Free Trade Association (EFTA) as a "strategic and decisive" step for Brazil's trade policy and Mercosur. The agreement, signed on September 16, aims to strengthen the integration of South American bloc countries into the European continent and present new trade opportunities for Brazilian exporters.

Key Takeaways:

  • The agreement eliminates 100% of import tariffs on industrial and fishery products from EFTA, with almost 99% of Brazilian exports destined for the bloc having free access.
  • Brazil will immediately liberalize 97% of its bilateral trade, maintaining protective margins in sensitive sectors.
  • The agreement also includes chapters on technical barriers, sanitary and phytosanitary measures, and trade facilitation, promoting transparency and predictability in trade between the blocs.
  • Brazilian trade flows under preferential regimes are expected to increase by 152% to US$184.5 billion, up from US$73.1 billion, with the conclusion of negotiations with EFTA, the European Union, and Singapore.

Specific to Brazil, the agreement is expected to add R$2.69 billion to the country's GDP by 2044, attract R$660 million in new investments, and increase exports by R$3.34 billion. The main beneficiaries of the agreement are those with the highest added value, including agro-industrial products, food, and industry sectors such as wood, cellulose, and semi-manufactured iron and steel.

Statistics:

  • 100% of import tariffs on industrial and fishery products from EFTA will be eliminated.
  • 99% of Brazilian exports destined for EFTA will have free access.
  • Brazil will immediate liberalize 97% of its bilateral trade, maintaining protective margins in sensitive sectors.
  • Brazilian trade flows under preferential regimes are expected to increase by 152% to US$184.5 billion.
  • R$2.69 billion in additional GDP is expected to be added to Brazil's economy by 2044.
  • R$660 million in new investments are expected to be attracted.
  • R$3.34 billion in additional exports are expected to be generated.

Sources:

  • "Alckmin says EFTA agreement is 'strategic and decisive' for Brazil and Mercosur" (September 16) - Ministry of Development, Industry, Commerce, and Services.
  • "Joint Declaration of the MERCOSUR Signatory States and the EFTA States" - EFTA/EFTA Member States.
  • "Joint MDIC/MRE/MAPA note" - Ministry of Development, Industry, Commerce, and Services.
  • "Factsheet - Mercosur-EFTA Agreement" - Ministry of Development, Industry, Commerce, and Services.