New Round of MERCOSUR–EFTA Negotiations

From Monday, May 6 through Friday, a new round of negotiations between MERCOSUR and the European Free Trade Association (EFTA) is being held in Buenos Aires, aiming to reach a trade agreement that is key for our bloc—one of the world’s five largest economies—as it advances its international integration and strengthens the competitiveness of its economies.

This is the eighth round of talks, and according to negotiators, the possibility of reaching an agreement with the bloc composed of Switzerland, Norway, Iceland, and Liechtenstein is becoming increasingly tangible.

In order to reach the broadest possible agreement, negotiators from MERCOSUR and EFTA are working across 18 thematic groups, covering areas such as market access for goods, trade defense, intellectual property, sanitary and phytosanitary measures, government procurement, investment, and telecommunications, among others.

The reasons for the importance of an agreement with EFTA are several. As emphasized by Argentina, which currently holds the Pro Tempore Presidency of MERCOSUR, the most notable include:

• The four EFTA member states are open and developed economies with trade figures significantly higher than what would be expected from a market of fewer than 14 million people. EFTA is the world’s ninth-largest trader in goods and fifth in services. It is the EU’s third-most important trading partner for goods and second for services.
• By negotiating with EFTA, MERCOSUR completes its strategy of market openness with major European economies and aligns itself with significant sources of Foreign Direct Investment.
• The negotiation with EFTA presents a challenge for both parties due to EFTA’s high competitiveness in industrial goods and services and its sensitivities in the agricultural sector—an area where MERCOSUR is highly competitive and concentrates its key interests.

How have the negotiations progressed?

• On October 11, 2016, MERCOSUR and EFTA concluded the Exploratory Dialogue by signing the joint document Overview of a possible MERCOSUR–EFTA Free Trade Agreement. Formal negotiations for an FTA began during Argentina’s Pro Tempore Presidency in 2017.
• Argentina has been coordinating the negotiations between MERCOSUR and EFTA by consensus among the bloc’s members. The first round was held in June 2017.
• The agreement under negotiation includes chapters on trade in goods, rules of origin, trade facilitation and customs cooperation, sanitary and phytosanitary measures, trade in services, technical barriers to trade, intellectual property, government procurement, trade and sustainable development, trade defense, investment, competition, and horizontal, legal, and institutional provisions.
• During the Fourth Round, held in Geneva in July 2018, progress was made on various chapters, and market access offers were exchanged for goods, services, and government procurement.
• The Fifth Round was held in Buenos Aires in October 2018, where the parties agreed on modalities for exchanging improved offers. The Seventh Round took place in Buenos Aires in March of this year, and the current Eighth Round is once again being held in the same city this week.