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The trade agreement between Mercosur and the European Union takes effect on May 1, with a direct impact on Brazilian exports. According to estimates by the National Confederation of Industry (CNI), more than 80 percent of the products sold by Brazil to the European bloc will have zero import tariffs in this initial phase.”

With no European Union tariffs, Brazilian companies will be able to sell most of their products to Europe without paying import duties, reducing costs and increasing their competitiveness against competitors from other countries.

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The agreement creates one of the largest free trade areas in the world, connecting a market of over 700 million consumers. According to CNI, more than 5,000 Brazilian products will have zero tariffs immediately, including industrial and agricultural goods.

Of the 2,932 products that will have zero tariffs from the outset:

• About 93% (2,714) are industrial goods
• The remainder includes items from the food sector and raw materials

Among the sectors expected to feel the greatest positive impact are:

• Machinery and equipment (21.8% of the 2,932 products with immediate tariff elimination);
• Food (12.5%);
• Metallurgy (9.1%);
• Electrical machinery, equipment, and materials (8.9%);
• Chemical products (8.1%).

In the case of the machinery and equipment sector, for example, nearly 96 percent of Brazilian exports to Europe will now enter duty-free. This includes products such as compressors, industrial pumps, and mechanical parts.

Strategic agreement

The agreement is considered strategic because it significantly expands Brazil’s commercial reach. Currently, countries with which Brazil has trade agreements account for about 9 percent of global imports. With the European Union’s entry, that figure could rise to more than 37 percent.

In addition, the treaty provides greater predictability for companies, with clear rules on trade, government procurement, and technical standards.

Despite the immediate impact, not all products will have tariffs eliminated at once. For more sensitive items, the reduction will be phased in gradually:

• Within 10 years in the European Union;
• Within 15 years in Mercosur;
• In some specific cases, such as new technologies, the timeline may extend to 30 years.

Next steps

The agreement’s entry into force marks only the beginning of its implementation. The Brazilian government must still regulate details such as the distribution of export quotas among Mercosur countries.

In addition, business associations from both blocs are expected to create a committee to monitor the agreement’s implementation and help companies seize new opportunities.

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