If the free trade agreement between EFTA and the four Latin American countries is concluded, Swiss SMEs will benefit from a competitive advantage across markets representing 270 million people.
Parliament will begin considering next summer the ratification of the free trade agreement between Switzerland and the four Mercosur countries (Argentina, Brazil, Paraguay, Uruguay). If approved swiftly in Switzerland, the free trade agreement will provide an advantage – at least temporary – to companies that trade with one or more countries in the region compared with their main competitors in the European Union, whose agreement with Mercosur has not yet been ratified. "In a difficult period marked by rising protectionism in the United States and the strengthening of the franc, it is very important for exporting companies to find new markets, particularly in Latin America," says Bruno Aloi, regional head at Switzerland Global Enterprise (S-GE). "With this agreement, 54% of Swiss products will immediately benefit from the elimination of customs duties in Mercosur countries. In fifteen years, this proportion will reach 96%. Currently, goods such as chemical and pharmaceutical products or components for the automotive industry are taxed at around 18 to 20%." The Federal Council expects savings in customs duties of more than CHF 155 million per year.
Maria Silvia Abalo, Director of the Swiss-Argentine Chamber of Commerce in Buenos Aires, also highlights progress in the protection of intellectual property for Swiss companies. "Pharmaceutical companies will, for example, be able to protect the results of their clinical trials in Argentina, whereas under current legislation anyone can appropriate this research." The agreement also includes provisions for service providers and investors and facilitates access to public procurement. The Federal Council has proposed safeguards regarding certain aspects of the treaty, particularly in the areas of agriculture and sustainability (see sidebar).
Brazil and Argentina
With a total of nearly CHF 4.8 billion and CHF 2.3 billion in trade in 2024, Brazil and Argentina are respectively Switzerland’s first and second trading partners in South America. Both countries offer opportunities across a range of sectors.
"Brazil is a market of around 200 million consumers, 10% of whom have a standard of living comparable to that of the Swiss middle class," observes Bruno Aloi. Swiss SMEs such as Curaden and Alpine White, active in dental care, or Caran d’Ache, a manufacturer of drawing and writing instruments, have been selling their consumer goods there for several years. Other companies supply B2B goods and services. They are active in medtech, mobility and aeronautics, as well as in food and agritech. "Mercosur markets, and Brazil in particular, are not yet consolidated. There are still many opportunities, as these countries have strong demand for new technological solutions," says Bruno Aloi. "There are also needs in the modernization of industrial infrastructure and in cleantech."
In Argentina, Maria Silvia Abalo points to minerals as a sector of interest for Swiss suppliers. Extraction is currently increasing sharply, with three Swiss multinational mining companies present in the country. "Smaller companies are also active in the sector, such as the Vaud-based Flyability, which has a presence in the country to market drones capable of accessing mining areas that are difficult to reach, or even dangerous, for humans."
With trade volumes with Switzerland of CHF 122 million and CHF 43 million, respectively in 2024, Uruguay and Paraguay are of particular interest to companies active in agriculture or cleantech.
Planning market entry
The ratification of the agreement, although important, will not be the only factor in the success of Swiss SMEs in the region. "It is important to take the time to understand how the market works," advises Bruno Aloi of S-GE. "Companies must also adapt to local requirements and navigate the bureaucracy. Finding a local partner also seems important to me. Once these obstacles are overcome, the growth potential is significant." Maria Silvia Abalo, of the Swiss-Argentine Chamber of Commerce, also notes that the Argentine economy, previously quite protectionist, is opening up further and that its ability to pay has improved.
The three chambers of commerce in the region in Buenos Aires, Montevideo and Asunción, as well as the Swiss Business Hub in Sao Paulo, are ready to support SMEs in the region. "This may involve helping them with logistics, understanding regulations and tax matters, organizing events, or identifying the right local partner," summarizes Bruno Aloi.
On the theme
Proposed safeguard measures
The Federal Council’s message on the free trade agreement between EFTA and Mercosur was published in February 2026. It clarifies aspects of the treaty that are currently the subject of intense debate in Switzerland, particularly in the areas of:
- Agriculture
Sensitive agricultural products, including meat, are subject to 25 bilateral import quotas. These are capped at less than 2% of total Swiss consumption or correspond to current import levels. - Sustainability
The Federal Council specifies the binding commitments undertaken in relation to climate change, the sustainable management of forest and marine resources, deforestation, biodiversity, as well as the protection of workers and the rights of indigenous peoples.
The message will be examined by Parliament during the summer and winter sessions of 2026.
Last modification 01.04.2026
