Italy’s Wood Supply Chain Urges Swift Trade Deal With South American Trade Bloc

MILAN — Now that the EU and the U.S. reached a trade deal, fixing tariffs on EU exports at 15 percent, the focus has turned to South America.

The Brazilian market, for example, is highly protected with an applied customs averaging duty of 13.5 percent, according to the European Commission.

On Tuesday, FederlegnoArredo, the Italian federation of woodworking and furniture industries which represents the majority of Europe’s luxury furniture-makers, said its president Claudio Feltrin met with Italy‘s Deputy Prime Minister and Minister of Foreign Affairs Antonio Tajani in July to discuss supporting a historic deal that would lift tariffs on goods to the region.

“The government insists that the European Commission finalize the Mercosur agreement as soon as possible. This would remove the existing tariffs for a very interesting area for our exports, starting with Brazil,” Feltrin said, adding that swift action would counterbalance the 15 percent tariffs on goods to the U.S. market. Brazil was strongly represented at Salone del Mobile.Milano in April, he stated. “They clearly appreciate our design products and offers great potential for growth and development for wood-furniture enterprises,” he said. His statements were first aired on Italy’s Class CNBC.

The EU encourages Brazil to reduce tariff and non-tariff barriers, and to promote a stable and more open regulatory environment for European investors and traders.

The 27-nation European Union and Mercosur, the South American trade bloc that includes Brazil, Argentina, Paraguay, Uruguay and Bolivia have been discussing a trade deal since 1999. A draft deal was finally announced in 2019, but it has not been backed by major EU countries like France. The European Commission said the deal will save EU companies 4 billion euros worth of export duties per year.

The European Commission reached an agreement with South American countries in December 2024 but delayed submitting it as it awaits ratification by the member states and the European Parliament. The goal of the EU Mercosur trade deal is to increase bilateral trade and investment and lower tariff and non-tariff trade barriers, notably for small and medium-sized companies. It would also create more stable and predictable rules for trade and investment through better and stronger rules, in the area of intellectual property rights, for example, as well as competition and good regulatory practices.

Feltrin said the spotlight was also on India, a country that is imposing mandatory certifications that will create roadblocks for Italian goods.

According to economists at Istat, Italy’s statistics bureau, forecasts in June said the Italian economy is expected to grow 0.6 percent in 2025 and 0.8 percent in 2026, lifted by improving domestic demand.

The nation’s largest industry confederation, Confindustria, insisted that amid difficult times, geographical diversification is key. The report said Italian exporters should focus on markets with high growth potential, such as the South American trade bloc, which contributed 7.5 billion euros to Italian exports. The report also mentioned India, Australia and South East Asia. According to Confindustria’s estimates, sales of goods to the rest of the world could increase by about 13 billion euros cumulatively in 2027, offsetting U.S. export losses.