MERCOSUR

Free trade agreement, signed on 16 September 2025.

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Information on the Free Trade Agreement

After eight years of negotiations, the EFTA states and Mercosur concluded a free trade agreement on 2 July 2025, which was signed on 16 September 2025.

The agreement between the EFTA states (Switzerland, Norway, Liechtenstein and Iceland) and Mercosur (Brazil, Argentina, Uruguay and Paraguay) is of major economic significance for Switzerland. With its limited domestic market, Switzerland depends on access to foreign markets to sustain growth and prosperity – for its businesses and for Swiss jobs. Mercosur, with a population of 270 million, is already an important and fast-growing target market for Swiss exporters. In 2024, Swiss goods exports to the Mercosur states exceeded CHF 4 billion, while imports stood at CHF 762 million (both figures excluding gold).

Under the agreement, around 96% of Swiss exports to the Mercosur states would be fully exempt from customs duties once the tariff phase-out periods have elapsed. Given the high tariffs currently applied by the Mercosur states, the agreement could deliver annual tariff savings of more than CHF 155 million – the largest savings potential of any Swiss free trade agreement after those with the EU and China, and broadly comparable to the agreement with India.

In return, Switzerland grants Mercosur a total of 25 bilateral tariff-rate quotas for sensitive agricultural products. Most quotas are small (less than 2% of total consumption) or set at a level corresponding to current import volumes, and are therefore tolerable for Switzerland’s agricultural sector. The Federal Administration maintained regular contact with representatives of the Swiss agricultural sector throughout the negotiations.

Beyond tariff barriers, the agreement would reduce technical barriers to trade, facilitate market access for Swiss service providers and strengthen bilateral economic relations more broadly. It would also prevent Switzerland from being placed at a disadvantage relative to the EU, which concluded its own free trade agreement with the Mercosur states in 2024.

The agreement includes a comprehensive chapter on trade and sustainable development, as well as a supplementary arrangement with additional commitments on the protection of forests and biodiversity and on sustainable agriculture.

Next steps

The Federal Council adopted the dispatch on the Free Trade Agreement in February 2026. Parliament will consider the matter during the summer and autumn 2026 sessions.

• Sustainability impact assessments of the EFTA–Mercosur Free Trade Agreement

  The State Secretariat for Economic Affairs (SECO) commissioned two complementary studies that examine the potential impacts of the Free Trade Agreement (FTA) between EFTA (Switzerland, Norway, Liechtenstein, Iceland) and Mercosur (Brazil, Argentina, Paraguay, Uruguay). The studies assess environmental, social and human rights impacts using a comparable methodology.

  Both studies model trade flows on the basis of the negotiated outcome and use a general equilibrium model to estimate economic effects and the resulting environmental and social impacts. Qualitative analyses complement the modelling; for the social study, these also draw on consultations with around 80 representatives from civil society, business and academia. The results are based on projections for the year 2040 and should be interpreted as a conservative (worst‑case) scenario.

  Under the FTA, Swiss exports to Mercosur countries would be 55% higher in 2040 than without the agreement, while exports from Mercosur countries would rise by about 5%. Overall economic effects are modest: trade flows would change only marginally at the global level (Switzerland: around +0.31–0.33%; Mercosur: around +0.12–0.13%), with similarly modest effects on GDP (Switzerland: +0.06%; Mercosur: +0.01%).

  Environmental impact assessment

  An environmental impact assessment was carried out by the World Trade Institute at the University of Bern on behalf of SECO and published in 2020. It analyses the effects of the agreement on greenhouse gas emissions, air pollution and land use.

  Overall environmental impacts are limited: greenhouse gas emissions would rise slightly in Switzerland (around +0.1% in 2040), while the impact in Mercosur countries (+0.02%) and globally (+0.0004%) is negligible. Air pollution would increase marginally in Switzerland but remain largely unchanged in Mercosur countries and worldwide.

  The modelling shows similarly limited impacts on deforestation in Mercosur countries (around +0.02%; worst-case +0.1%). Scientific evidence suggests that actual impacts are likely lower or negligible. As the agreement would not significantly change existing trade flows in environmentally intensive goods, it is unlikely to lead to substantial additional environmental impacts.

  Social and human rights impacts

  A study on social and human rights impacts was conducted in 2024/2025 by the Geneva Graduate Institute (Centre for Trade and Economic Integration) in collaboration with the World Trade Institute at the University of Bern. It examines impacts on labour markets, labour rights and selected human rights aspects.

  Here too, overall impacts are limited. The modelling indicates modest positive effects on wages and employment in both Switzerland and Mercosur countries, with only minor sectoral adjustments. In Switzerland, low-skilled workers and the agricultural sector are expected to benefit most. In Mercosur countries, modest employment gains are anticipated in agriculture and services, accompanied by slight declines in manufacturing. Impacts vary by gender and between urban and rural areas, but remain small overall.

  With regard to labour and human rights, no significant changes in protection levels are expected, as the relevant provisions largely correspond to existing international obligations. The study identifies potential for longer-term improvements through enhanced cooperation, dialogue and monitoring.

  Structural challenges in Mercosur countries – particularly regarding the enforcement of labour rights, informal employment, and regional and gender-based inequalities – persist independently of the agreement. The study therefore highlights the importance of accompanying measures focused on implementation, cooperation and oversight of existing standards.

  Conclusions

  The two studies reach consistent conclusions. Since overall changes in trade flows are limited, the agreement's environmental, social and human rights impacts are likewise modest. A positive overall outcome will depend decisively on the existing regulatory framework and the effective implementation and monitoring of the agreement.

  • Assessment of the potential environmental impacts of the EMFTA

    PDF7.55 MB1 June 2020

  • Assessment of the potential social impacts of the EMFTA

    PDF1.31 MB9 December 2025

• Legal basis

  • Original texts on the EFTA website

• Further information

  • BBl 2026 766 - Message on the approval of the Free Trade Agreement between the EFTA States and Mercosur | Fedlex (available in German and French only)
  • Factsheet EFTA (PDF)
    Overview of the EFTA–Mercosur Agreement

Factsheets

• EFTA-Mercosur Free Trade Agreement, trade and sustainable development (available in German only)

  PDF188.83 kB2 July 2025

• Factsheet: EFTA-Mercosur trade in goods (available in German only)

  PDF119.55 kB14 October 2025

Press releases

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