The EFTA and Mercosur countries concluded negotiations on a free trade agreement on 2 July 2025, after eight years of negotiations and signed it on 16 September 2025.
The agreement between the EFTA states (Switzerland, Norway, Liechtenstein and Iceland) and Mercosur (Brazil, Argentina, Uruguay and Paraguay) would have a significant economic impact on Switzerland. Switzerland has a limited domestic market. To ensure growth and thus prosperity, access to other markets is very important for our companies and therefore for Swiss workplaces. Mercosur, with its 270 million inhabitants, is already an important target market with great growth potential for the Swiss export industry. In 2024, Swiss exports of goods to the Mercosur states amounted to more than CHF 4 billion, while imports of goods totaled CHF 762 million (excluding gold in both cases).
With the agreement, around 96% of Swiss exports to Mercosur countries would be completely exempt from customs duties once the tariff reduction periods have expired. In view of the high customs duties in the Mercosur states, a free trade agreement could lead to considerable customs savings of more than CHF 155 million per year. After the agreements with the EU and China, this is the agreement with the highest potential for customs savings among all of Switzerland's free trade agreements and is roughly in the same range as the agreement with India.
In return, Switzerland will grant Mercosur a total of 25 bilateral quotas for sensitive agricultural products. Most of these quotas are small (<2% of total consumption) or the scope of the concessions corresponds to current imports. They are therefore acceptable to Swiss agriculture. The Federal Administration has been in regular contact with representatives of Swiss agriculture on this matter.
In addition to removing tariff barriers, the agreement would also reduce technical barriers to trade, facilitate market access for Swiss service providers and generally strengthen bilateral economic relations. The agreement would prevent Switzerland from being disadvantaged vis-à-vis the EU, which concluded a free trade agreement with the Mercosur countries in 2024.
The agreement also includes a comprehensive chapter on trade and sustainable development, as well as a supplementary agreement with additional commitments on forest protection, biodiversity and sustainable agriculture.
Next steps
• The Federal Council is expected to submit the agreement to Parliament for approval in 2026.
