Mercosur Deal: Council of States Committee Requests 517 Million for Agriculture
Following the National Council's rejection, a package of investment loans, sales promotion, and additional controls aims to secure a majority for the free trade agreement with South American states.
The National Council Rejected it in June
The free trade agreement with Mercosur has not yet gained a majority in the Swiss Parliament. The National Council rejected the proposal during the summer session with 96 votes to 86, with 9 abstentions.
The potential impact on Swiss agriculture was particularly contentious. A strong minority in the National Council had therefore requested a commitment credit of 880 million Swiss francs for 2028-2035. This aimed to mitigate the agreement's expected consequences for agricultural businesses. However, the motion did not find a majority.
The Federal Council, for its part, had foreseen an increase in agricultural subsidies of approximately 158 million Swiss francs. The proposal from the Council of States committee now lies between these two positions.
517 Million as a Political Middle Ground
The APK-S approved its proposal with 9 votes to 4. It calls on the Federal Council to allocate an additional 517 million Swiss francs for 2028-2033 to strengthen agricultural competitiveness.
The package consists of two parts: 480 million Swiss francs for investment loans and 37 million Swiss francs for sales promotion. A portion of the sales promotion is explicitly intended to support the export of Swiss agricultural products.
In addition, contributions for structural improvements are to be maintained at least at the level of the 2026 budget. With this, the committee aims to provide agricultural businesses with greater planning certainty over several years.
The Three Amounts in Comparison
ProposalAmountPeriodFederal Council158 million Swiss francs–APK-S517 million Swiss francs2028–2033National Council Minority880 million Swiss francs2028–2035
The 517 million, however, are not yet decided. This is a committee proposal. The Council of States will decide on the proposal next.
Not Just About Direct Payments
The 517 million are not intended as a lump-sum compensation to farmers. The largest portion is allocated for investment loans. This allows agricultural businesses to finance investments in their infrastructure and operational development, for example.
An additional 37 million Swiss francs are to be allocated to sales promotion. A portion of this is earmarked for promoting Swiss agricultural exports.
The committee deliberately links the free trade agreement with a long-term strengthening of competitiveness. Agriculture should be able to adapt to increased competition from imports, while new sales opportunities abroad should also emerge.
What Concessions Does Switzerland Make on Agricultural Products?
The Mercosur agreement provides limited market access for agricultural products. Switzerland grants Mercosur states 25 bilateral import quotas. These include specific quantities of meat and wine, among others.
The quotas do not mean that all corresponding products can be imported into Switzerland duty-free in the future. They allow for reduced-tariff imports within the specified quantities.
At the same time, Swiss importers are to benefit from the elimination or reduction of tariffs. According to parliamentary services, this could result in annual savings of approximately 155 million Swiss francs in tariffs.
A Market of Approximately 270 Million People
The economic importance of the agreement extends beyond agriculture. Mercosur includes Argentina, Brazil, Paraguay, and Uruguay, representing a market of approximately 270 million people.
Tariffs are to be eliminated for approximately 96 percent of Swiss exports under the agreement. In 2024, Swiss companies already exported goods worth over 4 billion Swiss francs to the four Mercosur states.
For the Swiss economy, this means improved market access in South America. For agriculture, it simultaneously creates additional competitive pressure due to easier imports of certain agricultural products.
The Committee Wants to Monitor the Consequences
The APK-S does not want to limit itself to financial compensatory measures. It additionally proposes that the Federal Council continuously monitors the agreement's effects on agriculture and other economic sectors.
The relevant parliamentary committees and affected parties are to be regularly involved. Furthermore, five years after the agreement comes into force, the Federal Council is to submit a report on its effects to Parliament.
This would be the first systematic review after its entry into force of how the agreement actually impacts Swiss agriculture and other economic areas.
Demands Regarding the Rainforest Remain Open
The debate over the Mercosur agreement is not limited to money and agriculture. Sustainability and social standards are also contentious.
The APK-S rejected a motion with 9 votes to 4 that sought to prohibit the import of goods produced wholly or partly under forced labor. The motion would have included, among other things, expanded investigative powers, provisional import bans in cases of justified suspicion, the publication of high-risk cases, and legal remedies.
At the same time, the committee advocated for Switzerland's international cooperation to continue supporting programs against deforestation and for sustainable value chains in Mercosur states, especially in the Amazon region.
However, the committee rejected the adoption of the EU Deforestation Regulation with 8 votes to 4, with one abstention. This means important sustainability issues remain politically contentious.
The Committee Says Yes – But Under Conditions
Despite the additional demands, the APK-S fundamentally endorsed the free trade agreement. In the overall vote, it adopted the federal decree with 11 votes to 2.
This is politically relevant: the committee is not attempting to renegotiate the agreement fundamentally. Rather, it aims to create conditions under which agriculture is more likely to accept the opening to Mercosur.
Whether this strategy succeeds remains uncertain. While the additional funds are significantly higher than the Federal Council's original proposal, they remain below the 880 million Swiss francs demanded by a minority in the National Council.
Now it is the Council of States' Turn
The proposal now goes to the Council of States. There it will be seen whether the additional measures for agriculture find a majority and whether the smaller chamber fundamentally approves the free trade agreement.
After that, the matter must go through Parliament again. Therefore, approval by the APK-S does not yet mean the agreement is finalized.
A referendum is also possible. Opponents have already announced resistance. The Greens, in particular, criticize what they see as insufficient binding requirements for rainforest protection, animal welfare, and forced labor.
517 Million to Overcome the Political Hurdle
The new proposal significantly changes the initial situation of the Mercosur agreement. Following the National Council's rejection, the Council of States committee is attempting to bring agriculture on board with additional investment and sales promotion funds.
The 517 million Swiss francs package is neither an already decided payment nor direct compensation for all possible disadvantages of the agreement. It is a political offer: agriculture is to be supported in its transition to greater international competition.
Whether this is sufficient will be decided in upcoming deliberations. One thing is already clear: the Mercosur agreement in Parliament will not be decided solely on the potential economic benefits for the export industry. It will also be crucial whether the proposed protection and compensatory measures secure a sufficient majority for agriculture.
Sources
- Swiss Parliament, Foreign Affairs Committee of the Council of States, Media release of September 4, 2026: "Conditional Yes to the Mercosur Agreement".
- Swiss Parliament, Case 26.033: "Free Trade Agreement between EFTA States and Mercosur. Approval".
- SRF, September 4, 2026: "Mercosur Deal: 517 Million Swiss Francs for Swiss Agriculture".
