Swiss parliament approves Mercosur free trade deal
Parliament has approved the EFTA free trade agreement with the Mercosur countries. Following the Senate, the House of Representatives has also approved a compromise under which the agricultural sector will receive half a billion Swiss francs in support. The final say is likely to rest with the people.
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Swiss parliament approves Mercosur free trade deal
On Wednesday, the House of Representatives approved the agreement by 118 votes to 66, with 10 abstentions. The left-wing Social Democrats and the Greens voted against the deal, with a few dissenters from the right-wing Swiss People’s Party.
Free trade with the Mercosur economic bloc will comes at a price, however. The government will have to provide an additional CHF517 million in support for the Swiss agricultural sector – that was strongly against the deal with Mercosur – over six years.
Disagreement over rainforest projects
The Social Democrats unsuccessfully called for a consultation process to be held on the extra financial support for agriculture. The minority motion tabled by the Social Democrats, the Greens and the Green Liberals to reduce this sum also failed.
Following the House of Representative’s decisions, the agreement is now effectively finalised in parliamentary terms, barring one remaining point of disagreement. This concerns the funds that Switzerland is to allocate to projects in the Amazon rainforest. The Senate wants a commitment at least on a par with current international aid to the region.
The House of Representatives, on the other hand, wishes to make an additional CHF25 million Swiss francs available. It rejected a higher sum of CHF50 million proposed by the Social Democrats, the Greens and the Green Liberals. The Senate will address this point of disagreement on Thursday.
Referendum announced
Immediately after the vote in the House of Representatives, the Alliance Against Rainforest Deforestation announced a referendum. The statement said that the free trade agreement had been concluded without effective measures against rainforest deforestation and forced labour. It argued that the agreement therefore created the wrong incentives.
The agreement between the EFTA states covers four Latin American countries: Argentina, Brazil, Uruguay and Paraguay. It will come into force as soon as the first EFTA state and the first Mercosur state have deposited their instruments of ratification with the depositary state, Norway. The other participating states may accede at a later date.
The agreement was signed a year ago in Rio de Janeiro. The new free trade agreement is expected to bring tariff reductions for around 98% of Swiss exports. Switzerland is granting the Mercosur states 25 bilateral import quotas for agricultural products, including meat and wine.
Most of the quotas are limited, and Switzerland can manage them autonomously. According to the message to Parliament, tariff savings of around CHF155 million per year are expected.
The “Mercado Común del Sur”, or Mercosur, was founded in 1991 by Brazil, Argentina, Uruguay and Paraguay; it comprises a market of 280 million consumers and is structured as a customs union.
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