EU–Mercosur Free Trade Agreement: Moving Forward

While last week’s headlines focused on developments in Venezuela, another significant regional milestone flew largely under the radar. On January 9, the EU authorized the signature of the EU–Mercosur Partnership Agreement and the Interim Trade Agreement—steps that would deepen economic (and likely political) ties between the EU and Mercosur members Brazil, Argentina, Paraguay, and Uruguay.

Although the agreements still require approval by the European Parliament and ratification by EU member states to enter into force (and will be sent to Mercosur’s member states for consideration), the timing is notable. Latin America is increasingly viewed as a strategic partner for key inputs ranging from soy and oil to rare earth minerals and lithium.

At the same time, we are seeing diverging approaches to international relations across the region. This is contributing to understandable uncertainty for governments and businesses alike—particularly as four major countries (Brazil, Colombia, Peru, and Costa Rica) head into national elections this year.

Coincidentally, the Lunar New Year beginning on February 17—overlapping with Brazil’s Carnaval—marks the Year of the Fire Horse in the Chinese zodiac, often associated symbolically with heightened energy and rapid change. As a metaphor, it aptly captures the pace and volatility of the geopolitical and regulatory shifts currently unfolding in Latin America.

For companies active in or entering the region, this environment calls for close monitoring of policy, trade, and regulatory developments—alongside the agility to seize opportunities while protecting existing investments. In periods of geopolitical realignment, preparedness and responsiveness are strategic assets.

Plastics in the News:  Single-Use, Containers, and Mandatory Recycled Content

• Chile’s Single Use Plastic Regulation

Chile just published the implementing regulation to its single use plastics law (Law No. 21.368/2021).  The new regulation establishes detailed rules to reduce the environmental impact of single-use plastics and plastic bottles by defining certification systems, technical requirements, and gradual obligations for producers and retailers. It creates a formal framework for “certified plastics,” requiring them to be compostable (at home or industrially) and to contain at least 20% renewable raw materials, with certification granted by the Ministry of the Environment based on verification by authorized technical entities. The regulation also mandates clear labeling, public access to certificates, and digital traceability systems, ensuring transparency and enforceability across the supply chain.

Plastic bottles are subject to their own rules.  The regulation introduces progressive recycled-content requirements for disposable plastic bottles—starting at 15% of domestically collected and recycled plastic and rising to 70% by 2060—along with certification, QR-code traceability, and oversight mechanisms. It strengthens reuse by requiring supermarkets to offer at least 30% returnable bottles in their display space, while providing calculation rules for compliance. Transitional provisions allow phased implementation, temporary certification mechanisms, and delayed labeling obligations, enabling industries to adapt while reinforcing Chile’s strong focus on the move to its circular economy.

• Brazil’s Mandatory Recycled Content

As reported in a recent edition, Brazil has issued an important environmental decree specific to plastics that requires plastic packaging – including imports – to mee progressively higher recycled-content targets—starting at 22% in 2026 and rising to 40% by 2040.  Now, the move has prompted formal complaints from its Mercosur partners: Uruguay, Argentina, and Paraguay, They argue that the short timeline harms exporters and was decided unilaterally outside Mercosur rules.

Uruguay, where plastics are a major export to Brazil, requested a one-year postponement, noting the difficulty of adapting production—especially for food-contact packaging—while industry groups warned of disruptions to several companies. Brazil reportedly defended the measure as non-discriminatory and part of its long-standing national solid-waste policy.  Although it Brazil committed consider the issue, it remains unresolved even after high-level discussions.

Link to Chilean Regulation:

https://mma.gob.cl/wp-content/uploads/2024/10/Reglamento-PUSU.pdf

Brazil: Mandatory Sustainability Reporting Now

As reported, Brazil became a global reference by adopting mandatory annual sustainability and climate related disclosures for all public companies in Resolution CVM 193/2023.  The measure adopted the International Sustainability Standards Board (ISSB) IFRS S1 and S2 as financial sustainability reporting standards for Brazilian publicly traded companies, investment funds, and financial securitization companies. While the rule was voluntary for listed companies as of 2024, it became mandatory as of January 1, 2026. The rule calls for reports to be subject to “reasonable assurance” as of this year.

Although Brazil stepped out in front in the region, it is not alone. As a reminder, Mexico issued a resolution in January 2025 requiring companies to prepare reports aligned with IFRS S1 and S2 for fiscal year 2025, submitted in 2026, with limited assurance starting in 2027 and reasonable assurance from 2028 onward. Other countries – like Chile and Colombia – are developing their own requirements around sutainability reporting.

Toothbrushes as Medical Devices? Yes, in Colombia

Colombia’s FDA-analog, INVISMA, recently cleared up confusion over what types of toothbrushes need sanitary registration as “medical devices” – and which don’t.  This recent agency ruling is just another example of how product classification does not cross borders – and is not always intuitive.  The correct regulatory framework for a product depends first and foremost on how that item is classified in that jurisdiction.

Now we know that in Colombia toothbrushes will be categorized as follows:

Products that are NOT Medical Devices

• Conventional manual toothbrushes
• Electric toothbrushes for daily personal use Intended for routine cleaning of teeth, gums, and tongue Used to remove food debris and bacterial plaque to prevent cavities and gum disease

The products do not require sanitary registration – and do not need to meet any additional regulatory requirements for manufacture or importation in Colombia.

Products that ARE Medical Devices

• Ultrasonic toothbrushes
• Toothbrushes using radiofrequency technology Designed to remove bacterial plaque and supra- or sub-gingival calculus May be abrasive to tooth enamel and soft tissues Intended for use by health professionals

The products require sanitary registration and comply with medical device manufacturing and import requirements.

INVIMA noted that it regulated oral hygiene technologies taking into consideration safety, intended use, and risk level.  It promised strengthening post-market surveillance to ensure compliance.

Chile Announces Enforcement Plans for 2026

Each year, Chile’s environmental agency (MMA) publishes its enforcement plans for the coming year.  This alone would be notable.  What makes the publications even more important is that the agency breaks out the plans by media and measure.  The recent plans published on January 9th covered enforcement of the following regulatory obligations, among others:

• Green Tax: Tax on air emissions of particulate matter, nitrogen oxides, sulfur dioxide, and carbon dioxide in accordance with the provisions of Article No. 8 of Law 20.780, amended by Law No. 21.210
• EPR Obligations: Management systems subject to Law No. 20.920, which establishes a framework for waste management, extended producer responsibility, and the promotion of recycling

These published plans even include the number of inspections the agency plans to conduct for each of the different regulatory measures in the coming year.

Companies with facilities or products covered by EPR on the market in Chile should take note.

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