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The EU-Mercosur Special Editions Series - What do our clients say about the EU-Mercosur Free Trade Agreement? No. 01 Automotive Industry

The EU-Mercosur Trade Agreement, signed in January 2026 in Asunción, establishes one of the world’s largest free trade zones, encompassing 700 million people and approximately 25% of global GDP. Experts at iMB.Solutions define the pact as a "Modernization Mandate" rather than a simple tariff reduction. Strategically, the deal serves as a geopolitical shield for South American industry against US protectionism and Chinese industrial subsidies.

The automotive landscape in South America is facing its most significant transformation in decades. With the formal signing of the EU-Mercosur Free Trade Agreement, the era of the 35% import tariff—the wall that protected Brazil's domestic car industry—is officially ending.

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