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Brazil Embraces Mercosur-EFTA Free Trade Deal

by Ulrika Lomas, Tax-News.com, Brussels

07 April 2014


Brazilian Foreign Minister, Luiz Alberto Figueiredo, has signaled the nation's backing for discussions to begin between South American economic bloc Mercosur and the European Free Trade Association (EFTA) towards a free trade agreement (FTA). His remarks came during a visit by Swiss Federal Councillor Johann Schneider-Ammann to Brazil's capital.

Schneider-Ammann said he now expects negotiations between EFTA (Iceland, Liechtenstein, Norway, and Switzerland) and Mercosur member states (Argentina, Brazil, Paraguay, Uruguay, and Venezuela) to begin in the coming months.

The announcement marks a major breakthrough following a political stalemate. Brazil is Switzerland's main trading partner in Latin America, with a trade volume of over CHF3bn (USD4.1bn), yet there are currently no investor protection or tax agreements in place between the two countries. Talks on an EFTA-Mercosur FTA have been on hold for almost fourteen years. Brazil's new stance is believed to be linked to progress in free trade negotiations between Mercosur and the European Union (EU), which aim to conclude a deal shortly.

Discussions between South America and EFTA will not be without difficulty, however, as each jurisdiction defends its own interests. Switzerland, for example, intends to negotiate free trade for its industrial products, while Brazil will seek lower duties on its agricultural products.

TAGS: tax | free trade agreement (FTA) | tax information exchange agreement (TIEA) | double tax agreement (DTA) | Iceland | Paraguay | Uruguay | Venezuela | Liechtenstein | Norway | agreements | Brazil | Switzerland | trade | European Union (EU) | Argentina | Europe | South America

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