National Council approves agreement with Mercosur (cross-border guide)

Context

In brief

• The National Council approves the Mercosur agreement with 118 votes in favor.
• 517 million allocated for agriculture in the 2028-2033 period.
• An additional 25 million planned for the fight against deforestation.
• The dossier returns to the States for a divergence on environmental credits.

Key facts

• Votes in favor: 118
• Votes against: 66
• Abstentions: 10
• Agricultural allocation period: 2028-2033
• Agriculture amount: 517 million francs
• Deforestation funds: 25 million francs

The National Council has approved, at the end of an intense parliamentary debate, the free trade agreement between Switzerland and the Mercosur bloc, which includes Argentina, Brazil, Paraguay, and Uruguay. The vote recorded 118 votes in favor, 66 against, and 10 abstentions, thus overcoming the initial rejection expressed by the Chamber in June. The dossier must now return to the Council of States for a review, due to a divergence that emerged between the two Chambers regarding the funds allocated to international cooperation for environmental protection.

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Operational details

The parliamentary debate highlighted how the Mercosur agreement is perceived by the center-right, including the Liberal Greens, as a strategic necessity for the Swiss export economy. In a historical period characterized by strong geopolitical tensions and growing fragmentation of international markets, with the consequent threat of increased tariffs, Switzerland is seeking to diversify its commercial outlets to reduce dependence on the European and US markets. Federal Councilor Guy Parmelin emphasized that the agreement is strategic, warning that the European Union has already provisionally implemented its own free trade agreement with the South American bloc as of the beginning of May. Every day of delay, according to the Federal Department of Economic Affairs, entails a loss of market share for Swiss companies competing with European partners.

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Key points

The procedure for finalizing the agreement now requires a final alignment phase between the two chambers of the Swiss Parliament. After the vote in the National Council, the dossier has returned to the Council of States to resolve the divergence regarding the 25 million Swiss francs in additional funding for international cooperation. Once both branches of Parliament have reached a common text, the Federal Council will be able to proceed with the official ratification. It is important to monitor upcoming parliamentary sessions to understand if the conditions set by the legislature regarding environmental matters will be fully integrated into the executive acts and if the Federal Council will succeed in implementing the control systems required to protect the country's agricultural and economic interests. For Swiss companies interested in exports, the current phase involves cautious waiting, pending the technical details on the methods for reducing duties and the sustainability requirements that will accompany transactions with the Mercosur bloc.

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