On July 2, 2025, the Mercosur member states(Argentina, Brazil, Uruguay, Paraguay) and the EFTA states(Iceland, Liechtenstein, Norway, Switzerland) announced in Buenos Aires that they had concluded their negotiations on a free trade agreement. The agreement prevents a disadvantageous position compared to the EU, which concluded a free trade agreement with the Mercosur states in 2024. It is due to be signed in the coming months.

The agreement will create a free trade zone with almost 300 million people. Almost 95% of exports from the common customs territory of Switzerland/Liechtenstein to the Mercosur states will be completely duty-free in the medium term. Partial concessions in the form of tariff reductions and tariff quotas apply to a small proportion of exports. Less than 4% of exports are excluded from tariff reductions. In view of the very high tariffs of the Mercosur states, which will be eliminated by the free trade agreement, the potential for tariff savings is great. For their part, Switzerland and Liechtenstein grant duty-free market access for industrial products, as is already the case under current legislation. The concessions in the agricultural sector consist of tariff quotas.

As a broad-based free trade agreement, the Mercosur-EFTA agreement will also cover trade in services, investment, intellectual property rights, government procurement, competition, rules of origin, trade defense measures, sanitary and phytosanitary measures, technical barriers to trade, legal and horizontal issues, including dispute settlement, and a chapter on trade and sustainable development with an additional declaration of intent. In it, the Parties commit to comprehensive commitments on trade-related aspects of sustainable development. These commitments reflect the shared ambition of the eight countries to ensure that the economic objectives of the agreement are consistent with their sustainable development goals.