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Trade agreement between Mercosur and the European Union partially came into effect on May 1st and could reduce taxes on wines, fruits, pasta, olive oils, chocolates, and other Italian foods imported by Brazil, with an estimated discount of up to US$ 63 million per year when the rules are fully in force.
The Italian Government’s projection indicates that wines, fresh fruits, and other Italian foods could become cheaper in Brazil with the trade agreement between Mercosur and the European Union, which partially came into effect on May 1st.
The tax reduction is expected to affect different categories of imported products over a gradual schedule.
According to CNN Brasil, a survey by the Italian Ministry of Foreign Affairs and International Cooperation estimates that the discount generated by improved tariff conditions could reach US$ 63 million per year on Brazilian imports of Italian items. The calculation was based on trade data from Mdic, the Ministry of Development, Industry, Trade, and Services.
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Italian Government Foresees Impact on Imported Foods
The food sector represents the majority of products Brazil buys from Italy. More than 80% of everything imported from the European country is food-related, which broadens the scope of the changes foreseen in the agreement.
In addition to Italian wines and fruits, the Italian Government also indicates that cheeses, chocolates, olive oils, biscuits, and pasta could benefit from the reduction in tax collection. The expectation is that some of these products will see faster reductions, while others will follow longer timelines.
Already in the first year of the agreement’s validity between the blocs, about one-third of the total purchased by Brazil from Italy is expected to be under the effect of tariff discounts. As implementation will be gradual, the forecast is that 75% of imports will benefit by 2031.
When the entire process is completed, the index of products covered by the new rules could reach 99%. The full completion of the schedule could take up to 15 years, depending on the category of each imported item.
Fruits and Wines Have Different Reduction Rates
The fresh fruit category appears as the biggest beneficiary right in the first year of the agreement’s effects. These products already received an immediate discount since the beginning of May, within the rules foreseen for the initial phase.
High-value sparkling wines, above US$ 8 per liter, and vegetable oils are also already under a special taxation regime. These items were included among the products with the fastest benefits within the new trade arrangement.
Cheaper wines will see a gradual price drop, without an immediate full reduction. Other imported products, such as olive oil, pasta, and chocolate Italian, will have tax reductions over periods that can range from 4 to 15 years, depending on the item.
Among the highest-value products purchased by Brazil from Italy last year, the category of pasta, biscuits, and pastry products moved about US$ 85 million in 2025. For the Italian Government, this group will have the largest absolute discounts during the agreement’s validity.
Mercosur-EU Agreement Began on a Provisional Basis
The free trade agreement between Mercosur and the European Union came into provisional effect last Friday, May 1st. In this first stage, the commercial part of the treaty comes into force, following the completion of internal procedures and the formal exchange of notifications between the parties.
This phase of the agreement seeks to facilitate trade between the blocs. The political and cooperation pillars, however, still depend on full ratification by all European Union countries, with no definite timeline for this to happen.
Imports were divided into seven categories, with a 15-year schedule for staggered tariff reduction. Each year, each category will see a gradual increase in the import duty discount, until it reaches 100%.
Rules Include Trade Protection
Even with the reduction of tariffs, the free trade agreement includes a chapter dedicated to trade defense. This part allows the application of anti-dumping and countervailing measures according to WTO rules, the World Trade Organization.
The expectation is that these measures will function as protection in case of unfair trade practices. Within this scenario, the Government of Italy sees room to expand the effects of tax reductions on Italian foods imported by Brazil.
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