The free trade agreement between Mercosur and the European EFTA bloc takes effect in phases, bringing customs advantages and an unprecedented requirement linked to clean energy for digital services.
Brazil’s Official Gazette recently published the decree formalizing the Free Trade Agreement signed between Mercosur and EFTA, an association comprising Switzerland, Norway, Iceland, and Liechtenstein. The implementation schedule varies by country: rules between Brazil and Iceland take effect on October 1st, followed by Norway on November 1st. The remaining partners await the completion of internal procedures.
The trade partnership opens significant doors for South American products. The European bloc, which generates an estimated GDP of US$1.4 trillion with a population of 15 million, will guarantee tariff exemptions and facilitated quotas for important commodities, such as soy meal and ethanol. Furthermore, the complete elimination of tariffs will apply to fishing and industrial goods, benefiting approximately 99% of Brazilian exports to the region.
Green Innovation and Data Center Attraction
One of the agreement’s key highlights is the inclusion of a pioneering clause aimed at the technology and digital services sector. The text stipulates that only foreign companies based in nations with electricity grids comprised of at least 67% renewable sources will be able to enjoy the agreed-upon commercial privileges.
With an energy matrix exceeding 90% clean sources, Brazil gains a competitive advantage in this strategy. This measure promotes the concept of powershoring, creating opportunities to attract significant foreign investments, such as the establishment of large data centers within the national territory.
The entry into force of the agreement is another step in Brazil’s strategy of commercial diversification and integration into the international economy.
The statement was made by Márcio Elias Rosa, a representative of the MDIC (Ministry of Development, Industry, Trade, and Services).
In return for the advantages gained abroad, the Brazilian government will immediately waive customs duties for 97% of bilaterally traded items. This initiative reinforces the government’s commitment to expanding the country’s presence in global markets, connecting economic expansion with environmental sustainability.
