The free trade agreement between the European Union and Mercosur, recently finalised after more than 20 years of negotiations, opens up unprecedented scenarios for Italian companies operating in the agri-food sector. A central chapter of this agreement concerns the protection of Geographical Indications (GIs), a protective instrument that Italy has used more than any other country in the world.

What does the GI agreement lay down

The agreement represents a significant achievement on the intellectual property front. It guarantees the recognition and protection of more than 350 European Geographical Indications in the Mercosur countries (Brazil, Argentina, Uruguay and Paraguay), including no less than 57 Italian products, including Balsamic Vinegar of Modena, Prosciutto di Parma, Mozzarella di Bufala Campana, Prosecco and Chianti Classico. According to the Italian Ministry of Foreign Affairs and International Cooperation, this is the largest number of geographical indications ever protected in a European Union trade agreement (the complete list of Italian GIs is available on the Ministry of Foreign Affairs and International Cooperation website: https://www.esteri.it/en/sala_stampa/archivionotizie/comunicati/2026/01/principali-novita-accordo-ue-mercosur/).

This means that Italian GIs will be protected from unfair competition and misuse, with strengthened enforcement mechanisms that will fight Italian Sounding more effectively in these strategic markets.

Opportunities for Italian companies

Mercosur represents a market of over 260 million consumers with a growing middle class and a growing interest in quality food products. The protection of GIs in this geographical area offers Italian businesses several concrete opportunities:

• Privileged access to expanding markets. Geographical Indication products will be able to be exported with greater legal certainty, consolidating the reputation built up over decades and the trust of South American consumers in Italian quality.
• Enhancement of the territorial brand. The legal protection of designations makes it possible to maintain that inseparable link between product and territory that constitutes the added value of Italian high quality products, preventing other operators from taking advantage of the reputation built by Italian producers.
• Counteracting the so called “Italian Sounding”. In the Mercosur countries, as in the rest of the world, products that evoke “Italia-ness” even though they are not produced in Italy, represent a significant phenomenon. The agreement provides more effective legal instruments to counter this form of unfair competition

Risks to be managed carefully

However, it would be naïve not to also consider the challenges that this agreement entails. The South American market presents some specific features that require strategy and awareness.

• Price competitiveness. Breaking down tariff barriers works in both directions. Italian businesses will have to contend with price-competitive South American agricultural products, making the ability to communicate the added value of GIs even more crucial.
• Complexity in enforcement. Although the agreement provides for safeguards, the actual implementation of the rules will take time and constant vigilance. The legal systems of Mercosur countries have their own characteristics and it will be necessary to familiarise with local procedures.
• Need for investment in marketing. Legal recognition is a prerequisite, but it is not enough. It will be necessary to invest in promotion and communication to make South American consumers understand the value of protected Italian geographical denominations.

GI as a strategic tool: now more than ever

In this context of market opening, Geographical Indication is confirmed as an essential strategic tool for Italian companies in the agri-food sector. It is not just legal protection, but a real competitive asset that allows businesses to stand out in increasingly crowded markets. For producers who have not yet considered adopting a GI, now is the right time to do so. For those already benefiting from it, the Mercosur agreement represents an opportunity to strengthen their internationalisation strategy, entering new markets with adequate protective instruments.

How to prepare for the new scenario

The EU-Mercosur agreement is not just a trade treaty, but an opportunity to further enhance the intangible heritage that makes Italian products unique. With the right preparation and tools, Italian  businesses can turn this challenge into a lasting competitive advantage.