Insight Focus
Mercosur and EFTA are set to sign a trade deal this month. The agreement, due to take effect in 2026, is expected to diversify and expand Brazilian exports. Coffee, corn and other higher-value products should benefit most.
Mercosur, EFTA to Formalise Agreement This Month
Mercosur and the European Free Trade Association (EFTA)—a free trade area formed by Switzerland, Norway, Iceland, and Liechtenstein—are expected to formalize the signing of a free trade agreement this month. The agreement is expected to be implemented by the end of 2026.
With a per capita GDP of around USD 85,000 per year—about eight times the Brazilian average—EFTA countries represent a promising market for higher value-added products. Export opportunities for Brazil include items such as specialty coffees, organic foods, and premium meats.
Source: Comex.
The agreement should also boost the diversification of Brazilian exports to EFTA countries, which are currently concentrated in aluminium oxides and gold. In the coming decades, Brazilian shipments to EFTA are expected to double, reaching over USD 6 billion per year.
Regarding agricultural sales, there will be an increase of approximately USD 1.8 billion per year, according to the Brazilian government. Considering all of Mercosur—comprising Argentina, Brazil, Paraguay, and Uruguay—the projection is for an annual increase of USD 2.7 billion in agribusiness exports.
Brazil’s exports to EFTA countries generated USD 3.1 billion in 2024. Although still far from the volumes traded with more robust blocs—such as the EU, which accounted for USD 48.3 billion in 2024—sales to EFTA have been gaining momentum. Between 2015 and 2024, shipments grew nearly 50%, according to Comex.
Source: Comex
Coffee on the Rise
Some products have already been gaining prominence in the export agenda for EFTA countries. One of them is coffee. Shipments of the commodity to Switzerland, Norway, Iceland and Liechtenstein increased 72% between 2015 and 2024, according to Comex.
Source: Comex
“With the agreement, there is a trend toward increased shipments, particularly for higher-value-added products such as specialty coffees,” says Márcio Ferreira, president of the Brazilian Coffee Exporters Council.
The formalisation of the free trade agreement comes at a particularly opportune time. Since President Donald Trump implemented 50% tariffs on Brazilian products last month, coffee exports to the US—the main destination for the Brazilian crop—have begun to decline.
In August, exports of roasted and unroasted coffee to the US dropped nearly 20% compared to the same month last year, according to Comex.
Opportunities for the Corn Market
Another popular Brazilian commodity within EFTA is corn. Since 2022, corn exports to the bloc have soared, rising from near zero in 2018 to 100,000 tonnes in 2024. Unless there are major upheavals in global trade or the geopolitical landscape, the outlook should remain positive.
Source: Comex
Brazilian corn has been gaining ground in the international market, including Europe, due to two main factors: competitive pricing and a significant increase in production, which grew by around 35% between 2015 and 2024. This growth has paved the way for new export destinations, such as the EFTA countries.
Source: Conab
The geopolitical landscape has also favoured this trend. “The disruption in the global grain market caused by the war in Ukraine—one of the world’s leading producers—is one of the factors that drove the growth of Brazilian exports to EFTA,” says Daniel Rosa, technical director of the Brazilian Corn Producers Association.
Trade Agreement with EU Moves Forward
Mercosur’s trade agenda with the EU has also been moving forward. After more than two decades of negotiations, the European bloc approved the final text of the free trade agreement with Mercosur on September 3. The document now awaits review by member countries and the European Parliament.
France, which had resisted the treaty due to internal pressure related to agricultural protection, has adopted a more favourable stance. Other countries in the bloc are also showing interest in expediting the process to conclude the partnership. US tariff pressure on European countries is considered one of the main reasons for the accelerated negotiations.
The Brazilian government has shown interest in quickly concluding the agreement. The EU is currently Brazil’s second-largest trading partner, behind only China. In 2024, Brazilian exports to the bloc totalled USD 48.3 billion, according to Comex.
Source: Comex
The elimination of customs tariffs should boost shipments of a series of products, including coffee, soybean meal and cellulose, which are prominent in the export agenda.
Source: Comex
