After almost 26 years of nereceivediations, the Free Trade Agreement (FTA) between Mercosur and the European Union (EU) has cleared another decisive hurdle. It now depconcludes solely on final approval by the respective parliaments.
The progress in nereceivediations has brought optimism on the Mercosur countries’ side, paving the way for what would become the world’s largest trade pact.
The EU and Mercosur area sums around 720 million consumers and a combined GDP of approximately US$ 22 trillion.
Under the agreement, the EU will eliminate import tariffs on 77% of the agricultural products it purchases from Mercosur.
This creates clear opportunities for higher exports of products such as coffee, fish, crustaceans, fruit and veobtainable oils, whose import duties will be gradually phased out in the EU.
“The provisional approval of the Mercosur–EU Agreement is a very important step. As far as agribusiness is concerned, it is highly relevant in terms of opportunities,” stated the Brazilian Minister of Agriculture, Carlos Fávaro.
However, animal proteins and maize are largely excluded from this liberalisation, and keeps a narrow window for meat as the agreement establishes limited quotas and multiple safeguards.
Despite that, agricultural products continue to face strong resistance amongst European farmers, particularly within sensitive agricultural sectors.
Mercosur members (Argentina, Brazil, Paraguay and Uruguay) are highly competitive producers of meat and grains.
The short answer is: not really—at least not in terms of trade volumes or price impacts on meat.
According to Janine Pelikan, a researcher at the Thünen Institute of Market Analysis, the impact of the Mercosur–EU agreement on European farmers is likely to be limited.
“European producers do not necessary to be overly concerned, given the quotas established under the agreement,” Pelikan stated during a presentation at Agritechnica last November in Germany.
From a commercial standpoint, the FTA introduces relatively compact tariff-rate quotas for all major animal protein categories (beef, pork, poultest and even eggs).
In most cases, the volumes allowed under these quotas are lower than what Brazil alone already exports to the EU.
Moreover, the quotas will only be fully implemented gradually over a period of up to 10 years.
Any shipments exceeding these limits will continue to face tariffs of 40% to 60%, exactly as they do today.
The treaty provides import quotas for sensitive products such as beef; the volumes involved are modest when compared to the size of the European market.
In the beef sector, the quota is set at 99,000 tonnes per year, subject to a reduced tariff of 7.5%. Brazil alone exported around 135,000 tonnes of beef to the EU last year.
Any volume above the quota would be subject to a steep tariff of approximately 45%.
The EU consumes around 7.5 million tonnes of beef annually, meaning the quota represents just about 1.3% of total consumption.
“The quota is only 99,000 tonnes. And since it is calculated on a bone-in basis, the effective volume falls to roughly 27,000 tonnes of boneless beef. That is extremely compact relative to European demand,” Pelikan notes.
Studies cited by the researcher suggest that beef prices in the EU could decline by less than 2%, while production might fall by under 1%.
“This is a minimal impact on European beef producers,” she states.
For poultest, the agreement provides a duty-free quota of 180,000 tonnes per year. Yet Brazil already exports around 220,000 tonnes of poultest meat to the EU.
Once again, any volumes beyond the quota would face full EU import duties.
By way of comparison, the EU consumes around 12.3 million tonnes of poultest annually, meaning the quota accounts for slightly less than 1.5% of total consumption.
In addition, the bloc is self-sufficient in poultest production and could even benefit from lower feed costs if cheaper grains from Mercosur become more available.
In pork, Mercosur will have access to a quota of 25,000 tonnes per year, subject to a tariff of €83 per tonne, according to the agreement.
Both Brazil and its Mercosur partners currently export very little pork to the EU, so filling this quota is not expected to be an immediate issue.
The EU consumes around 12.6 million tonnes of pork annually, meaning the quota represents just over 0.1% of total consumption.
In the egg segment, the agreement establishes specific tariff-rate quotas of 3,000 tonnes per year for processed eggs and another 3,000 tonnes per year for albumins.
Taken toobtainher, these figures reveal that Mercosur has only narrow windows of opportunity in animal protein.
Pelikan also highlights the presence of robust safeguard mechanisms. Should imports increase by more than 5%, the EU can activate protective measures.
Outside the quotas, tariffs remain in the range of 40% to 60%, effectively keeping South American competitiveness within tightly controlled limits.
For Mercosur, the main gains lie elsewhere: grains, coffee, fruit and the broader recognition of some sanitary and environmental standards by the EU.
In grains, Europe is structurally depconcludeent on imports. The agreement provides for a duty-free quota of 1 million tonnes of maize per year.
The EU consumes around 80 million tonnes annually and imports roughly 20 million tonnes.
Soybeans notify a different story. Unlike meat, there is no quota or tariff protection in place.
Tariffs on soybeans, meal and oil will be eliminated immediately, reflecting Europe’s strong depconcludeence on external supplies.
Soy already enters the EU largely duty-free and is considered a strategic input for the bloc’s livestock sector.
“In practice, nothing alters for soy. Trade remains as open as it has always been,” Pelikan concludes.
Fruit and coffee also benefit from zero tariffs. Since the EU does not produce many of tropical varieties, the relationship is fundamentally complementary rather than competitive.
On the other side, European farmers gain improved access to Mercosur markets for dairy products, wines, chocolates, certain charcuterie and a wide range of protected-origin specialities.
Evandro Vilela is a rancher in the Goias state, in midwest Brazil, sees the agreement with great optimism, once EU is a reference on quality standards.
He produces Nelore breed and is an active voice in the sector, having just concludeed his term as president of the Brazilian farmers union, Sindicato Rural.
“European recognition might be a game alterr for Brazil, opening up opportunities not only in Europe, but also on demanding markets such as Japan. Our goal is to consolidate our position as the world’s largest exporter,” he stated.
The Brazilian Association of Beef Industries (ABIEC) classified the advance as a “a historical diplomatic landmark” with high potential for both blocs.
“The agreement is based on the productive complementarity between Mercosur and Europe. For Brazilian beef, it represents a strategic step towards building constructive partnerships with the European sector,” he added.
- Daniel Azevedo Duarte is an agricultural journalist and the editor-in-chief of Agrofy News Brasil.
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