EU–Mercosur deal agreed: tariffs on clothing to be phased out by 2033

The European Union and the South American trade bloc Mercosur have reached a political agreement on their long-negotiated partnership deal. For the textile and apparel sector, the agreement brings concrete and time-bound changes that will shape trade between the two regions.

What is new is that tariffs on clothing and apparel, currently ranging from 8 to 12 percent, will be phased out entirely. According to the agreement, tariffs will be reduced in equal annual steps over eight years, with all affected products becoming duty-free by 1 January 2033, provided the agreement enters into force in 2026.

Mercosur is a South American trade bloc comprising Argentina, Brazil, Paraguay and Uruguay. Together with the EU, the two regions account for around one fifth of global GDP.

For the EU, the agreement is expected to facilitate cheaper and easier imports of new clothing from Mercosur countries, where textile and garment production plays an important role in export industries.

The deal also includes a dedicated chapter on sustainable development. The Paris Agreement is defined as an essential element of the partnership, allowing for measures in cases of serious non-compliance. Trade in illegally produced goods is prohibited, and the parties commit to cooperation on more sustainable supply chains.

For the EU textile market, the agreement marks a clear shift in trade policy, as reduced trade barriers coincide with ongoing efforts to introduce extended producer responsibility, promote circular economy models and reduce overall material flows. How these objectives will be balanced in practice remains to be seen.