Key facts
- Switzerland's lower house of parliament approved a trade agreement with Mercosur.
- The deal includes 517 million Swiss francs in financial aid for Swiss farmers over six years.
- The lower house approved the deal with 118 votes in favor, 66 against, and 10 abstentions.
- The agreement covers EFTA states and the Mercosur bloc of Argentina, Brazil, Paraguay, and Uruguay.
- The Alliance Against Rainforest Deforestation announced a referendum on the agreement.
Switzerland's lower house of parliament approved a trade agreement with the South American bloc Mercosur on Wednesday, days after the upper house had given its backing. The deal, which also includes financial support for Swiss farmers, passed with 118 votes in favor and 66 against, with 10 abstentions.
The lower house had initially rejected the Mercosur deal in June but approved it after lawmakers included financial aid for farmers worth 517 million Swiss francs ($631 million) over six years to cushion the agreement's effects. Farming is a sensitive policy area in Switzerland, and the trade accord is likely to be put to a referendum under the country's system of direct democracy.
The agreement between the member states of the European Free Trade Association (EFTA), which includes Switzerland, Norway, Iceland, and Liechtenstein, and the core Mercosur bloc of Argentina, Brazil, Paraguay, and Uruguay, is expected to bring tariff reductions for around 98% of Swiss exports. Switzerland will grant Mercosur states 25 bilateral import quotas for agricultural products, including meat and wine. Tariff savings of around 155 million Swiss francs per year are expected.
However, the deal faces opposition. The Social Democrats and the Greens voted against it, and the Alliance Against Rainforest Deforestation announced a referendum, citing a lack of effective measures against rainforest deforestation and forced labor. A point of disagreement remains regarding funds Switzerland will allocate to projects in the Amazon rainforest, with the Senate and House of Representatives holding different positions on the amount.