EU–Mercosur deal could lift cargo flows through Port of Santos

Approval of the trade agreement between the European Union and Mercosur—expected to be signed on the 17th of this month, according to Vice President Geraldo Alckmin—could lead to higher cargo volumes at the Port of Santos, driven by sectors set to benefit from increased exports and imports. The pact is one of the world’s largest free trade agreements, covering 27 countries, a market of 718 million people and a combined GDP of US$22.4 trillion.

As a result, the Port of Santos is likely to play a central role in supporting the anticipated expansion in trade flows. According to Anderson Pomini, president of the Santos Port Authority (APS), the port is already preparing for increased demand through a series of logistics and infrastructure projects. These include deepening the navigation channel, improving access on both banks, advancing the Santos–Guarujá tunnel project and other ongoing initiatives.

Pomini also highlighted the need to address bottlenecks that have delayed the implementation of the STS10 container terminal, expand the port’s operational perimeter and develop truck logistics hubs, measures he said are designed to position Santos for the next two decades.

Brazil’s agribusiness sector, along with manufacturers of machinery and vehicles and companies such as Embraer, are expected to expand business with EU countries under the agreement.

Products likely to benefit include beef, pork and poultry, which will receive preferential quotas and tariff reductions; fresh fruits such as avocados, melons and table grapes, which will gain tariff-free access within up to seven years; coffee, both green and soluble, with lower tariffs; ethanol and sugar, both under preferential quotas with reduced duties; and orange juice, fish, crustaceans and vegetable oils, which are set to see tariffs eliminated.

Pomini also said the impact of the agreement could extend beyond Europe. In his view, the deal—negotiated over 26 years and marked by technical complexity—could attract interest from major Asian economies such as India or from Middle Eastern countries in pursuing new trade agreements with Mercosur, potentially generating further, as yet unquantified, gains.

Source: Autoridade Portuária de Santos (APS)

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