Mercosur-EFTA free-trade agreement is ratified in Brazil

The Brazilian National Congress published Legislative Decree No. 146/2026 this week, approving the Free Trade Agreement between Mercosur and EFTA (Iceland, Liechtenstein, Norway, and Switzerland). The agreement provides for the liberalization of approximately 97% of bilateral trade and the gradual reduction of tariffs to 1.2%, with preferential access to nearly 99% of Brazilian exports.

Notably, upon entry into force, the agreement will eliminate tariffs on industrial and fishing products from EFTA countries, directly impacting the competitiveness of Brazilian industry. In the agricultural sector, the agreement combines tariff reductions with quotas for items such as meat, corn, honey, and vegetable oils.

In addition to tariff reductions, the agreement brings significant advances in the regulation of non-tariff barriers, particularly in the field of sanitary and phytosanitary measures. The provision for pre-approved lists of establishments, the recognition of the Brazilian inspection system, and regionalization mechanisms are expected to impact exporters’ operating costs and regulatory risks, which have traditionally been affected by technical and sanitary barriers.

For the agreement to take effect internationally, however, internal approval from Brazil alone is not sufficient. Under Article 16.5 of the agreement, it will enter into force only on the first day of the third month following the deposit of the instruments of ratification, acceptance, or approval by at least one Mercosur member state and one EFTA member state, with Norway acting as the depositary.

To date, only Iceland has deposited its instrument of ratification of the agreement within the EFTA framework. Brazil is expected to deposit its instrument of ratification in the coming days, allowing the agreement to enter into force on the first day of the third month following that deposit.

Demarest’s International Trade and Customs team remains available to assist in evaluating impacts and adjusting operations to the new regulatory landscape.