Brazil and Argentina forecast $6bn export growth potential as EU-Mercosur pact nears completion
Executive summary: Brazil and Argentina announced a potential $6 billion increase in export growth, tied to the upcoming EU‑Mercosur trade agreement. The projected growth could open new markets for agricultural commodities and manufacturing, influencing global commodity prices and investment flows.
Who is involved: Brazil, Argentina, the European Union, Mercosur bloc, Confindustria and Italy’s Ice agency.
Likely next: Negotiations will move toward ratification, with companies preparing to expand exports and regulators reviewing tariff schedules.
In September, Confindustria and ICE highlighted the EU‑Mercosur agreement's potential to boost trade. Brazil and Argentina have announced a combined $6 billion increase in export capacity, signalling expanded market access. The development is expected to affect agricultural and industrial sectors and may reshape supply chains. While opportunities are sizable, implementation will depend on final treaty details.
What's next — scenarios
Full Implementation & Market Integration (40%)
Significant margin expansion for South American agribusiness and manufacturing exporters to the EU.
- Formal signing of the EU-Mercosur treaty
- Ratification by major EU member state parliaments
Stagnation & Bureaucratic Deadlock (45%)
Wasted capital expenditure as companies fail to realize projected $6bn growth due to non-tariff barriers.
- Prolonged technical disputes over environmental standards
- Failure to align sanitary and phytosanitary regulations
Protectionist Pivot (15%)
Erosion of investment sentiment in Mercosur industrial sectors as domestic subsidies increase.
- Introduction of new EU environmental levies (CBAM) specifically targeting Mercosur goods
- Sudden shifts in Argentinian or Brazilian trade policy toward import substitution
What to watch
- Official communique from the EU-Mercosur negotiating bodies by late Q4 2024
- Implementation progress of the EU Deforestation Regulation (EUDR) over the next 90 days
- Monthly export volume data for Brazil/Argentina agricultural commodities (Dec 2024)
Timeline
- — Toscana medaglia d’argento dell’export grazie all’oro di Arezzo (Il Sole 24 Ore — Economia)
Analysis — what this means
Likely next events
- EU and Mercosur finalize legal text
- Brazil and Argentina issue implementation roadmap
- Industry associations announce trade missions
Sectors affected
- Agriculture
- Manufacturing
- Automotive
- Food & Beverage
Regulatory implications
- EU trade policy revision
- Customs procedure updates
- Environmental compliance for increased exports
Historical parallels
- EU‑Central America FTA negotiations
- NAFTA implementation in the 1990s
- EU‑Japan Economic Partnership Agreement
Key entities
Sources
- Toscana medaglia d’argento dell’export grazie all’oro di Arezzo — Il Sole 24 Ore — Economia
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