The Mercosur-EU Agreement: Unlocking Agricultural Trade Opportunities After 25 Years of Negotiations
After nearly 25 years of negotiations, the Mercosur-EU agreement has been concluded. It was long considered an unreachable milestone, but, thanks to a mix of international circumstances and political will on both sides, it is now in force for the 27 EU members and the four original Mercosur members (Argentina, Brazil, Paraguay, and Uruguay).
When the technical negotiations began in 1999, the euro was not yet circulating in Europe. Although the first political agreement was reached in 2019, that step only opened the second part of the talks. The Amazon fires, political tensions with the Brazilian government of the day, and the resistance of European farmers froze any chance of progress, with France playing the role of staunch defender of European agricultural interests.
Then came the pandemic, changes of government on both sides of the Atlantic, and increasingly demanding European environmental requirements following the approval of the Green Deal, also in 2019, which ruled out sending to the Council of the European Union and the European Parliament any agreement that lacked environmental clauses. The negotiation was only concluded in Montevideo at the end of 2024.
The European Commission split the deal into two pieces: an interim trade agreement, which can move forward without going through the 27 national parliaments, and a broader association agreement, which does need them. With that shortcut, and with the signing in Paraguay at the beginning of 2026, the trade part began to apply provisionally on May 1.
The word provisionally is key. The European Parliament asked the Court of Justice of the EU to rule on the agreement’s compatibility with the European treaties, and final approval still depends on that path (a process that can take up to two years). It is therefore worth keeping in mind that the agreement works, but the story is not entirely closed. The judicial question remains to be resolved, followed by approval in the European Parliament, which would confirm the trade pillar and allow the remaining EU members to incorporate the other two pillars of the agreement — the political and cooperation pillars — into their legal systems.
The Impact on the Agricultural Sector
The EU will liberalize around 92% of its imports from Mercosur, with additional preferences for another 7.5%. In practice, almost all South American agricultural products are covered by tariff benefit. Mercosur, for its part, will open its market more gradually, with longer periods to reduce its own tariffs, even modifying, in the final stretch of the negotiation, the tariff phase-out schedules for a few products, such as automobiles, at Brazil’s request.
Besides the opening tariff, the access expected for Mercosur comes mainly from larger quotas. These have been at the center of the debate in recent months because of the difficulties Mercosur members have had in distributing them, especially their failure to agree on beef.
As for the quotas, the products listed below are those that enter the EU under quotas.
- Beef
- Poultry
- Rice
- Honey
- Corn and sorghum
- Dairy products
- Pork
- Eggs
In some cases, the quotas will open progressively until reaching their maximum access in tons, with an in-quota tariff. Others do not, and reciprocal quotas were also defined, as in the case of dairy.
Regarding the access obtained for the agricultural and agro-industrial sector in the EU, in many cases, Mercosur’s current export flows already exceed the benefit obtained through the quotas. What matters, therefore, is lowering the tariff on the flows exported under them, which does not mean the product cannot continue to be sold outside the quota at a higher tariff. The quotas thus provide predictability for users, which is why it is so important that Mercosur reaches an agreement on how to distribute them.
Trade Between Mercosur and the EU
The agreement between Mercosur and the EU arrives at a suitable time, especially because both blocs have shown little dynamism since 2011, something that has certainly changed since the agreement came into force in 2026. In 2025, goods trade between the blocs reached U.S. $126 billion, implying a trade deficit for the EU. Goods trade between the two blocs grew at an annualized rate of 4.2% between 2001 and 2025, but with sharp declines, especially in Mercosur’s exports to the EU from 2011 onward. In fact, the historic record of EU imports from Mercosur, reached in 2008, has still not been surpassed.
The Impact on the Region’s Economy
Here it is worth being realistic without losing optimism. For Mercosur, the EU is an enormous partner, and the agreement gives it preferential access to a market of 450 million consumers with high purchasing power, but the effect will not be felt overnight, much less in countries where trade with the European bloc is highly concentrated in terms of markets, products, and companies. Tariff reductions and quotas are applied in stages, and the deepest opening comes over a horizon of years.
The positive impacts expected for Mercosur are in agriculture and agro-industry, through better export prices linked to the new access conditions. Beef is an example: The in-quota tariff is 7.5%, and 0% for the Hilton quota (in Uruguay’s case), which substantially improves on the previous conditions. An opportunity is also expected for expanding the food industry, achieving higher aggregate value. The agreement provides clear rules on investment and standards, an incentive to expand investment and business partnerships. In addition, markets will have to meet stricter standards, which will favor a more competitive and efficient market and involve the states, especially Mercosur, which will have to implement good practices that will support its proper functioning.
When the benefits of the Mercosur-EU agreement are discussed, the analysis tends to focus on exports and agriculture, undoubtedly the sector that benefits most in Mercosur. However, the improvement for importers must also be considered, as well as trade in services, such as the investments already mentioned and the possible levels of cooperation that would improve business conditions between the two blocs.
Some Doubts
Beyond the undisputed benefit expected for agriculture, and with concrete examples of benefited sectors already visible (fisheries, beef, honey, rice, fruit, among others), some difficulties remain. They are tied not only to the legal process under way in the EU, but also the defense mechanisms the EU may deploy. The safeguard clause is an issue to watch closely, as are sanitary rules like those the EU applied to trade with Brazil (antimicrobials), and the effects on export flows of the Carbon Border Adjustment Mechanism and EU Deforestation Regulation.
On Mercosur’s side, its members still must settle the distribution of the quotas, a necessary step to give certainty to operators and thus make better use of the agreement.
After 25 years, it is tempting to celebrate this agreement as the end of a process, but it undoubtedly opens to another stage: putting in place, in each Mercosur country, the conditions to take full advantage of an agreement with one of the largest markets in the world.
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