Portuguese Exporters Gain Massive Edge in New Brazil Trade Deal

Portuguese Language Advantage Positions Exporters in Mercosul Markets

Portugal's Secretary of State for Industry João Rui Ferreira has identified a significant strategic advantage for Portuguese exporters in the EU-Mercosul trade agreement: linguistic dominance in the southern cone. With Portuguese spoken across Mercosul nations, companies based in Portugal are positioned to leverage cultural and linguistic ties in Latin America, a move that could reshape export trajectories for key sectors like footwear, wine, and olive oil.

The Language Edge in Mercosul

Speaking at the Micam footwear trade fair in Milan, Ferreira framed the EU-Mercosul pact as a platform for doing business tailored to Portuguese strengths. Portuguese firms gain cultural and linguistic leverage against other EU competitors in Brazil, Argentina, Paraguay, and Uruguay—an advantage that extends beyond footwear to multiple export sectors.

The Portuguese footwear industry already exports over 90% of production to 172 countries, but heavy reliance on European buyers leaves it vulnerable to regional slowdowns. The Mercosul agreement represents an opportunity to diversify export markets and access new consumer bases in South America where Portuguese language and cultural familiarity provide competitive advantages.

Comparing Mercosul with the India Deal

Ferreira drew a contrast with the EU-India Free Trade Agreement, also finalized in January 2026. While that pact covers a significant consumer base and creates opportunities for Portugal's wine and olive oil sectors, its implications differ substantially from the Mercosul agreement.

The Mercosul deal offers more immediate relevance for Portuguese manufacturers seeking to access South American markets, where cultural ties and language affinity create natural business connections. In contrast, the India agreement addresses different market dynamics and consumer segments.

Finalized Strategy for 2026–27

The Portugal economy ministry has completed the footwear sector's 2026–27 internationalization strategy, providing regulatory certainty for the first time in years. This plan, backed by relevant government agencies, allocates support to help smaller enterprises navigate new markets, establish distribution networks, and meet international commercial requirements.

For businesses in Portugal, the finalized strategy represents a commitment to geographic diversification. The government is backing initiatives to help small and medium-sized enterprises explore opportunities in Latin America, leveraging Portugal's historical and linguistic connections to the region.

Brand Development and Market Challenges

One persistent challenge for Portuguese footwear makers is building brand recognition among end consumers. While the "Portuguese Shoes" label commands respect in professional circles for quality and craftsmanship, few Portuguese brands have established household-name status in retail markets globally.

Ferreira acknowledged this challenge, noting that creating proprietary brands requires sustained capital investment—a hurdle for smaller manufacturers. The government is promoting collaborative strategies to give smaller enterprises the scale needed for marketing and brand-building efforts.

Economic Resilience Through Diversification

The broader context of Ferreira's remarks centered on economic resilience through market diversification. Portugal has weathered recent economic challenges better than many EU peers, partly because exporters have already begun diversifying away from over-reliance on traditional European markets. South America represents a growth opportunity that can reduce exposure to any single region's economic downturn.

Labor Productivity in Context

Ferreira emphasized that modernizing labor practices is about raising productivity and maintaining competitiveness on the global stage. The government seeks fair and balanced trade where all competitors meet the same social and environmental standards—a principle relevant to trade discussions with Mercosul nations.

Moving Forward

For companies in Portugal, the practical takeaway is regulatory clarity for the coming period and government support for market entry into new regions. The finalized 2026–27 strategy signals that Portugal's government and industrialists view geographic diversification into Latin America as a strategic priority, leveraging the nation's unique linguistic and cultural position in the region. However, implementation will depend on how trade agreements progress through regulatory approval processes across participating nations.