In this newsletter, we analyze the Employment and Social Trends 2026 report published by the International Labour Organization (ILO)[1] to highlight the main trends in employment, productivity, and international trade for 2026, with a focus on the Brazil–Europe axis.
We examine how demographic changes, the reorganization of value chains, and the reconfiguration of trade flows may affect job quality, business competitiveness, and labor management in operations connecting these two markets.
Productivity, International Trade, and Competitiveness
According to the ILO report, the transition of workers into more productive and formal sectors has slowed in recent decades, limiting income growth and economic competitiveness. In 2026, global productivity is expected to grow by approximately 2.0% – a stable but insufficient pace to mitigate structural weaknesses in several regions (ILO, 2026, p. 18).
At the same time, sectors integrated into international trade show better levels of formal employment and higher wages, particularly in middle-income countries such as Brazil (ILO, 2026, p. 51). For companies operating between Europe and Brazil, this means that investments in professional training, operational efficiency, and legal compliance are no longer merely internal measures – they directly influence competitive positioning.
Demographics, Productivity, and Integration in the Europe–Brazil Axis
Europe faces population aging and limited employment growth, factors that may undermine productivity and innovation in the medium term (ILO, 2026, p. 43). This context tends to increase the search for opportunities to reconfigure value chains in other markets.
In Latin America, employment is growing, but persistent challenges related to informality and low productivity limit the conversion of demographic potential into sustainable growth (ILO, 2026, p. 30).
For companies operating between Europe and Brazil, the scenario is complementary: the relative labor shortage in Europe and the demographic availability in Latin America reinforce the importance of productive integration, workforce qualification, and consistent labor governance across global value chains.
Trade Agreements and Labour Standards: The Role of the EU–Mercosur Agreement
Within this context, the European Union–Mercosur Association Agreement[2], by promoting trade in goods and services and establishing cooperation mechanisms in strategic areas, contributes to employment and productivity gains in the member countries of both economic blocs.
Although the agreement does not unify national labor laws, it raises regulatory expectations for companies operating between the two blocs, particularly regarding value chain management and compliance with international labour standards. For companies in the Europe–Brazil axis, this implies strengthening labour compliance frameworks and reviewing internal policies to ensure alignment with the commitments undertaken in the agreement.
2026 Has Already Begun: Labour and Productivity Strategies for Now
In light of these trends, several action fronts are immediate priorities for companies operating between Europe and Brazil:
- Map labour exposure in global value chains
Review employment, outsourcing, and supply agreements to identify risks related to informality, working conditions, and compliance with international standards, with the aim of mitigating indirect labour liabilities and reducing reputational exposure. - Integrate productivity and labour strategy
Reassess roles, working hours, and service models with legal support. Productivity-driven changes should be conducted in coordination among operations, HR, and legal teams, since poorly planned restructurings may generate labour disputes and administrative penalties. - Anticipate demographic impacts in Europe
Plan the reskilling of experienced workers and invest in training younger workers in view of potential labour shortages, ensuring that a lack of workforce planning does not compromise competitiveness. - Strengthen compliance and social governance in Brazil
Enhance internal audits and monitoring of labour practices, particularly in operations linked to European groups. This reduces the risk of misalignment between local practices and standards required by international business partners.
Strategic Support for Operations in the Europe–Brazil Axis
The 2026 landscape requires anticipation, as the way companies address productivity, workforce qualification, and labour standards will be decisive for business sustainability in the coming years.
Our team continuously monitors regulatory, labour, and compliance developments related to international trade and regional agreements, including the EU–Mercosur Agreement. Contact us to assess risks, opportunities, and strategies related to employment and productivity in the Europe–Brazil axis.
[1] Available at: Employment and Social Trends 2026 | International Labour Organization.
[2] Available at: Acordo de Parceria entre Mercosul e União Europeia — Siscomex.
Priscila Márcia da Silva Santos is associate at Pacheco Neto Sanden Teisseire Law Firm.
Luccas Miranda Machado de Melo Mendonça is associate at Pacheco Neto Sanden Teisseire Advogados.
