EU-MERCOSUR: STRATEGIC OPPORTUNITIES AND PRACTICAL
IMPLICATIONS FOR ITALIAN BUSINESSES
Key takeaways from the DG TRADE Italian Edition discussion – 26 May 2026

INDEX

• Executive Summary
• Market Access, Competitiveness and Regulatory Simplification
• Sector-Specific Implications and Strategic Considerations for Italy
• Conclusions

Executive Summary

The DG TRADE Italian Edition discussion on 26 May 2026 provided a practical overview of what the EU-Mercosur Agreement could mean for Italian businesses, placing the debate within a broader geopolitical and commercial context. The discussion made clear that the agreement is being framed not only as a trade instrument, but also as a strategic response to Europe’s declining competitive position in parts of Latin America, particularly in comparison with China’s growing economic footprint in the region.

A central message from the speakers was that the agreement would create opportunities for European exporters by reducing both tariffs and administrative barriers, while preserving EU regulatory standards. For Italian businesses, this could translate into stronger market access, improved protection for geographical indications, and a more predictable commercial environment in sectors where Italy has established strengths. At the same time, concerns around sensitive agricultural imports were directly addressed, with assurances that EU food safety requirements and market safeguard mechanisms remain fully in place.

Market Access, Competitiveness and Regulatory Simplification

Much of the discussion focused on the practical implications of the agreement for European companies seeking to expand in Mercosur markets. Speakers emphasized that the commercial value of the agreement goes well beyond tariff reductions. A major advantage lies in the reduction of non-tariff barriers that often make exporting costly and slow, including duplicative technical checks, burdensome certification procedures, and import authorization processes that create uncertainty for businesses.

The agreement was also presented as a strategic tool to strengthen Europe’s competitive position in Latin America at a time when Chinese firms have become increasingly embedded in the region. According to the speakers, European businesses currently face a structural disadvantage in markets such as Brazil and Argentina, where China has consolidated its presence while European market share has weakened. Because China does not currently benefit from an equivalent trade arrangement with Mercosur, the agreement could improve the relative position of European exporters, particularly in sectors such as automotive manufacturing, fashion, wine, and industrial goods where Italian companies are especially active.

Sector-Specific Implications and Strategic Considerations for Italy

A more technical part of the discussion focused on rules of origin, which will determine whether products qualify for preferential tariff treatment. Speakers acknowledged that these requirements can be complex and differ significantly depending on the sector, especially where supply chains rely on components sourced globally. This means that businesses will need to assess carefully whether their products can effectively benefit from the agreement in practice.
For Italy, the agreement was presented as especially relevant for industries that rely on quality, brand value, and product authenticity. The protection of geographical indications was highlighted as a concrete gain, with products such as Parmigiano Reggiano expected to benefit from stronger recognition and protection in Mercosur markets. Agricultural sensitivities were also openly discussed, particularly concerning beef imports, with the Commission underlining that monitoring tools and safeguard measures are intended to mitigate risks for vulnerable European sectors. The discussion also briefly addressed Mercosur’s evolving political composition, including Bolivia’s prospective accession and Venezuela’s continued suspension, both of which may shape future developments.

Conclusions

The discussion framed the EU-Mercosur Agreement as a strategic attempt to combine economic opportunity with geopolitical positioning, offering new openings for European businesses while seeking to preserve the regulatory safeguards and market protections that remain central to the EU’s trade approach:

• • The EU-Mercosur Agreement is being positioned as both a commercial opportunity and a strategic instrument to strengthen Europe’s presence in Latin America.

• • For Italian businesses, the most immediate potential benefits lie in improved market access, reduced administrative barriers, and stronger protection for high-value branded products.

• • Real commercial gains will depend on companies’ ability to navigate technical implementation issues, particularly rules of origin and product-specific compliance requirements.

• • While sensitivities remain in agriculture, the Commission’s message was that regulatory protections and monitoring mechanisms are designed to ensure that market opening does not come at the expense of EU standards or vulnerable sectors.

NEW BUDGET 2025 IN BOLIVIA: TAX BENEFITS FOR INDUSTRY AND COMMERCE

The Bolivian Law No. 1613, enacted on January 1, 2025, approves the General State Budget (PGE) for the fiscal year 2025 and introduces several provisions that may be of interest to businesses and economic actors in Bolivia. These measures aim to promote industrialization, import substitution, and economic reactivation.

Key Provisions:

1. Tax Incentives for Industrialization: To encourage industrialization and reduce import dependency, the PGE 2025 establishes an exemption from the Value Added Tax (VAT) and customs duties for the importation and commercialization of capital goods and industrial plants. This benefit applies to sectors such as agriculture, industry, construction, and mining, facilitating the acquisition of machinery and equipment necessary for productive development.

2. VAT Exemptions on Hydrocarbon Imports: To ensure the supply of fuels in the domestic market, the importation of crude oil, gasoline, and diesel oil is exempted from VAT. This measure aims to mitigate the impact of international prices and ensure the continuous supply of these essential resources.

3. Incentives for Profit Reinvestment: The PGE 2025 introduces incentives for foreign companies to reinvest their profits in the country. Depending on the percentage of reinvestment, partial exemptions are granted on the Corporate Income Tax for Foreign Beneficiaries (IUE-BE). For instance, a reinvestment of 25% to 49.99% of profits results in a 10% exemption on the corresponding tax.

4. Use of Virtual Assets by Public Companies: Public companies are authorized to use virtual assets to fulfill contractual obligations. This provision allows greater flexibility in financial transactions and could influence how payments and contracts are managed in the public sector.

These provisions of the PGE 2025 present both opportunities and legal challenges for businesses and economic stakeholders in Bolivia.

For the official text of Law No. 1613, please refer to the Gaceta Oficial del Estado Plurinacional de Bolivia.

The MTEPS regulates the salary increase applied to workers for the 2024 fiscal year.

 On May 1, 2024, the Bolivian government promulgated Supreme Decree No. 5154, which aims to establish a 3% increase in the basic salary and a 5.85% increase in the National Minimum Wage, resulting in a new amount of Bs.2,500. It applies to all private sector workers. It will be retroactive from January 2024, must be paid by May 31, 2024, and reported to MTEPS by June 30, 2024. In the public sector, it applies to the following sectors: Health, Fiscal Teaching, Departmental Service of Social Management, Armed Forces, and Bolivian Police.

Tax incentives for the importation of flex-fuel technology vehicles and hybrid vehicles.

Supreme Decree No. 5142 of April 10, 2024. Supreme Decree 5142 implements customs and financial tax policies to incentivize the importation and manufacturing of flex-fuel technology vehicles, as well as tax incentives for importing hybrid vehicles. The objective is to "encourage the use of plant-based additives through the importation of flex-fuel technology vehicles, diversifying the energy matrix, and modifying the tax treatment for the importation of hybrid vehicles." The rates for the Customs Duty (GA) and the Specific Consumption Tax (ICE) for the importation of flex-fuel technology motor vehicles will be zero percent for three years, while the rates for the Customs Duty and the ICE for the importation of self-recharging hybrid vehicles will be 10%.

New Regulation for the Registration of Foreign Investment in the Plurinational State of Bolivia. Board Resolution No. 043/2024 of March 26, 2024.

The president of the Central Bank of Bolivia (BCB), Edwin Rojas, presented the "Online RIOF System" (RIOF) developed by the Issuing Entity to facilitate the timely submission of this statistical information, allowing the creation of various specialized documents that it publishes, such as the "Balance of Payments and International Investment Position Report," the "Foreign Private Capital in Bolivia Report," and the "Private External Debt Report."