While an agreement aims to facilitate the export of the Swiss machinery and services industry, South American countries could in return increase their meat sales in Switzerland. Swiss farmers fear price pressure and their main union said on Saturday that concessions in the agricultural sector sometimes went too far. For example, the Swiss had made more concessions in the beef sector than their EU counterparts. The union will review the agreement in detail before saying whether it will support it or not. Mercosur is an important business partner of EFTA and will provide EFTA companies with privileged access to a market of more than 260 million consumers. Bilateral merchandise trade between EFTA and Mercosur amounted to 5.8 billion euros in 2018, EFTA exports amounting to 3.7 billion euros and Mercosur`s imports to 2.1 billion euros. As a result, the new free trade agreement will allow EFTA exporters to benefit from progressive tariff reductions and ensure a level playing field with their main competitors in this important market. Two studies commissioned by the Swiss government did not foresee, if at all, any negative effects on the environment or agriculture of the free trade agreement with the Mercosur countries. Switzerland had negotiated the free trade agreement for two years. Foreign Minister Ignazio Cassis stressed its importance during a visit to Brazil in April as part of a trip to South America. For more details on the EFTA-Mercosur Free Trade Agreement, you will find a chapter-by-chapter on the free trade agreement.
“The limited expected environmental impact is due to the fact that the free trade agreement does not involve changes in trade in products with a high environmental impact and does not open the door to new flows of these products,” a government press release said. According to a statement from the Swiss Ministry of Economy, about 95% of Swiss exports to Mercosur, which has a population of 260 million, would be duty-free. Technical barriers to trade would be removed, Swiss service providers would have easier access to markets, and bilateral economic relations would be strengthened. The agreement, which has yet to be ratified, was announced Friday night on Twitter by Brazilian President Jair Bolsonaro. Switzerland, a member of EFTA, confirmed the measure that evening, but details of the agreement were not published until Saturday afternoon. Supporters of a trade agreement with Mercosur, such as the Swissmem Mechanical and Mechanical Engineering Companies Association and the Schweizerische Wirtschaftsverband economiesuisse, welcomed the recovery for Swiss exporters, but the Swiss agricultural sector remains concerned. The first study – carried out by the World Trade Institute of the University of Bern in June 2019 – analysed the environmental impact that trade could have in Switzerland and the Mercosur countries, with 2040 being the reference year. On Tuesday, the State Secretariat for Economic Affairs (SECO) and the Agroscope published two studies on the possible environmental and agricultural consequences of the AELE-Mercosur free trade agreement.
Details of the agreement are available in www.efta.int/sites/default/files/documents/legal-texts/free-trade-relations/mercosur/2019-08-24-EFTA-Mercosur-Chapter-Description-of-FTA.pdf. The comprehensive and broad free trade agreement includes trade in goods, trade in services, investment, intellectual property rights, public procurement, competition, trade and sustainable development, legal and horizontal issues, including dispute resolution.