Brazilian President Luiz Inacio Lula da Silva signed a decree on Tuesday enacting a free trade agreement between the Southern Common Market (Mercosur) and the European Union (EU), advancing the implementation of one of the largest planned trading areas globally. The agreement, which was previously approved by Brazil’s Congress, is scheduled to begin taking effect gradually starting May 1.
The deal follows a lengthy negotiation process spanning more than two decades. Officials said the agreement is intended to strengthen trade ties between the two blocs while supporting broader multilateral cooperation. The framework outlines a phased approach to lowering trade barriers and expanding market access across multiple sectors.
Under the terms of the agreement, tariffs on more than 90 percent of goods traded between Mercosur and the EU are set to be gradually reduced or eliminated. The phased rollout is designed to allow businesses and industries time to adjust while promoting increased trade flows over time. The initial implementation phase will focus primarily on trade-related provisions, including tariff reductions, trade facilitation measures, and government procurement rules.
The agreement connects a combined market of approximately 720 million people. Mercosur includes Brazil, Argentina, Paraguay, and Uruguay, with Bolivia currently in the process of joining the bloc. The partnership is expected to enhance economic integration between South America and Europe by improving access to goods, services, and investment opportunities.
In addition to tariff reductions, the framework includes provisions aimed at simplifying customs procedures and improving regulatory cooperation. These measures are intended to reduce administrative barriers and support more efficient cross-border trade. Government procurement rules are also part of the initial phase, opening opportunities for companies from both blocs to participate in public-sector tenders.
The gradual implementation structure reflects the scale and complexity of the agreement. Trade provisions will be introduced in stages, allowing policymakers and industries to monitor impacts and make adjustments where necessary. Further elements of the partnership may be developed over time as cooperation between the two blocs expands.
The enactment of the agreement marks a key procedural step toward full implementation, with Brazil moving forward following legislative approval. Other Mercosur members are also expected to proceed with their respective domestic processes as the agreement moves into its rollout phase.
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